(Anna Moneymaker/Getty Images)

Post-shooting, investors are doubling down on a Trump second term

Market prices in a bigger boost to Trump than it did after stunning debate

7/15/24 11:02AM

The attempted assassination of Donald Trump at a rally this weekend has investors betting on stocks that are supposed beneficiaries of his presidency, as well as Republican political success more broadly.

On PredictIt, odds of Trump winning the presidency rose to as high as 68% versus 59% on Friday.

Investors are running back the “post-debate” playbook: the price action on Monday resembles June 28, the session after Joe Biden’s poor debate performance seemingly fortified Trump’s electoral prospects.

A thematic basket of stocks compiled by Goldman Sachs of companies that should benefit from Republican victory in the November election are having their best day of the year, up about 1.8% as of 10:40 am ET. They’re outperforming a basket of stocks that would purportedly stand to gain from Democratic political successes by the most this year.

Some companies poised to ride this political wave are posting large gains. Private prison companies GEO Group, and CoreCivic (formerly Corrections Corporation of America) are surging. So are Fannie Mae and Freddie Mac, which would stand to gain from renewed privatization efforts.

Private education firms such as Grand Canyon Education, and private college operator Laureate Education are also trading to the upside.

Coal companies Peabody Energy and Arch Resources are having strong good days, as some traders seemed to bet on reversal of some climate-related Biden administration initiatives.

On the opposite side of the ledger are shares of firms associated with Democratic policies priorities, including solar firms like Maxeon Solar Technologies, Sunnova Energy and First Solarand health-insurance companies that’ve built large businesses around Obamacare’s insurance plan exchanges including HCA Healthcare and Tenet Healthcare.

One big exception from this pattern: Shares of Trump Media & Technology Group are up over 30% this morning after inexplicably having fallen double digits the day following the presidential debate.

In the bond market, the spread between 2- and 30-year US Treasury yields uninverted this morning for the first time since January, driven by higher 30-year yields.

Higher odds of a Trump win aren’t seen as impacting the trajectory for the Federal Reserve’s policy rate in the near term, but are associated with a higher floor for – and more uncertainty surrounding – growth and inflation over the medium term.

“If the market senses that Trump’s chances to win are higher than they were on Friday — then we would expect the back end of the bond market to sell off in the manner we saw in the immediate aftermath of the debate,” writes Michael Purves, CEO and founder of Tallbacken Capital Advisors.

However, foreign exchange markets continue to defy Wall Street’s top prognostication for a second Trump term in office: US dollar strength.

The Dollar Spot Index is flat this morning, and down slightly against the euro — even as economists at Goldman Sachs spotlight the potential negative macro effects Trump’s economic agenda may have on growth and inflation outcomes in the euro area.

Matt Phillips13h

Nasdaq Composite enters correction territory, joining small-cap Russell 2000

The Nasdaq Composite closed down 10.9% from its high of 24,019.99 — reached during intraday trading on October 29 — putting the tech-heavy benchmark conclusively into a “correction.”

A correction is Wall Street’s term of art for a sell-off that’s graver than a garden-variety slump, but not quite as dire as a bear market. (A bear market commences when prices are down 20% from a peak.)

While the proximate cause in the Nasdaq turndown seems to be t he war — the Composite is down more than 5% since the start of the conflict on February 28 — it’s worth noting that the index had been stalled out for three months prior to that.

At least Nasdaq investors aren’t alone: the small-cap Russell 2000 slipped into a correction last Friday. The S&P 500 has held up better, relatively speaking, though it, too, is down more than 7% from its intraday high of 7,002.28, which it touched on January 28.

Markets sell off as Mideast conflict shows no sign of ending

The S&P 500, Nasdaq 100, and Russell 2000 all fell while oil rose.

Toby Bochan13h

Max Knoblauch16h

Hertz and Avis Budget appear to be benefiting as travelers balk at airport wait times

As the Department of Homeland Security shutdown drags on, resulting in some excruciating airport wait times, rental car companies Avis and Hertz are seeing a boost.

Both companies are up more than 10% on Thursday, continuing a weeklong trend of trading momentum. From market close on March 20 to midday Thursday, Avis shares are up about 44%, while Hertz shares are up 24%.

Would-be flyers may be pivoting from sky to highway, even as gas prices climb. According to TravelPulse, search traffic for Hertz is up 15% in recent days.

The TSA is experiencing the longest wait times in its 24-year history, officials have said. Airfares rising as jet fuel prices remain elevated is likely adding to travelers’ decision.

Hertz Reports Spike in Car Rental Searches as US Airports Deal With Long TSA Lines

Would-be flyers may be pivoting from sky to highway, even as gas prices climb. According to TravelPulse, search traffic for Hertz is up 15% in recent days.

The TSA is experiencing the longest wait times in its 24-year history, officials have said. Airfares rising as jet fuel prices remain elevated is likely adding to travelers’ decision.

Saleah Blancaflor17h

US gas prices increase $1 in 1 month as markets expect $4 per gallon in coming days

As gas demand remains on the rise in the midst of spring break season and crude oil prices rise as hopes the Iran war will draw down decrease, gas prices have steadily risen.

According to the American Automobile Association, the national average price for a gallon of regular gas is up $0.10 from the previous week and up $1 since last month. AAA reports that there was a steep rise from $2.98 on February 26 to $3.98 as of March 26.

AAA said that average gas prices could hit $4 per gallon in the next few days, which would mark the first time since August 2022 that they’ve hit that level.

According to the Energy Information Administration, demand for gas rose last week from 8.72 million barrels per day to 8.92 million. The data also shows that domestic gas supply fell from 244 million barrels to 241.4 million. Meanwhile, gas production grew last week, averaging 9.7 million barrels per day.

Prediction markets show traders pricing in a 61% chance the price of gas could surpass $4 by the end of the month. As AAA projects that gas prices could continue to rise in the next few weeks, markets also imply there’s a 42% and 40% chance gas could finish roughly around $4.02 or $4.04 per gallon, respectively, by March 31.

(Event contracts are offered through Robinhood Derivatives, LLC — probabilities referenced or sourced from KalshiEx LLC or ForecastEx LLC.)

National gas prices increase one dollar in one month

AAA said that average gas prices could hit $4 per gallon in the next few days, which would mark the first time since August 2022 that they’ve hit that level.

(Event contracts are offered through Robinhood Derivatives, LLC — probabilities referenced or sourced from KalshiEx LLC or ForecastEx LLC.)

Max Knoblauch18h

Ethanol players climb following the Trump administration’s move to waive summer gas regulations

Ethanol-exposed companies are climbing on Thursday, following the Trump administration’s move yesterday to waive summertime limitations on the sale of E15 gas, a blend of fuel containing 15% ethanol.

Sale of the higher-ethanol blend is limited in about half of the US over the summer months to lessen smog. Including this year, those limitations have been waived for five summers in a row. According to Axios reporting, E15 typically costs about $0.10 to $0.40 less per gallon while delivering slightly lower fuel economy.

Ethanol companies are climbing on the decision, with Rex American Resources up more than 5%, Green Plains up 3%, and Gevo up about 2%. Rex and Gevo also closed higher on Wednesday.