Trump: Why Tesla, cryptocurrencies and private prisons were big winners from his election victory

Financial markets reacted to Donald Trump’s victory in the US presidential election with a sharp rise.

This comes despite significant debate over how Trump’s plans to impose tariffs, cut taxes and deport millions of migrants could affect the world’s largest economy.

A week later, this increase appears to have stabilized. The three major U.S. stock indexes closed lower on Tuesday after rising nearly 5% since Nov. 4, the day before the election.

These are the companies that wonas investors ponder what the next four years might bring.

Tesla shares are up about 35% since November 4th.

This growth caused the company’s market value to once again exceed US$1 trillion (1,000,000,000,000) for the first time since 2022 and increased the wealth of its director Elon Musk, who owns almost 13% of the company’s shares, by more than US$50 billion.

The rise reflects investor bets that the Trump White House may soften some safety regulator investigations into certain features, such as self-driving cars.

Links between Trump and Musk also could help Tesla navigate changes in US-China relationswhere the company has a significant presence.

While Trump is generally expected to cut government support for electric vehicles, such as through tax breaks, analysts believe it could benefit Tesla, the market leader in the US, while creating additional difficulties for its rivals.

The price of the most famous cryptocurrency, Bitcoin is up more than 25%reaching a new record this week, boosted by Trump’s victory, which briefly broke the $89,000 barrier.

The success is a sign that investors expect big changes in the sector, which during the Biden administration has faced a crackdown from regulators who warned it was rife with charlatans and scammers.

Trump himself once called cryptocurrencies a hoax, but during his election campaign this year he changed his position. promising to turn the US into the “crypto capital of the planet”.

He said he would create a strategic bitcoin reserve and fire Gary Gensler, the chairman of the country’s Securities and Exchange Commission, who has sparked anger by suing such companies under current financial laws.

Cryptocurrency companies insist that the sector must be subject to new, tailored rules. That will likely depend on Congress, where they could also get a more favorable hearing this year.

Shares of some of the largest U.S. banks posted double-digit gains the day before the election, and investors are betting that Financial institutions will be among the most direct beneficiaries of Trump’s promises relax the rules.

Among other issues, the president-elect will have a say in shaping expected rules that will set how much cash banks must keep on hand as margin.

Also Trump is expected to break with Lina Khan, the current head of the Federal Trade Commission.known for its antitrust stance and accused of obstructing investment deals that are a source of business for banks.

Shares of Capital One and Discover, whose merger is pending regulatory review, rose more than 15% after the election results.

Shares on the stock market of the main companies operating prisons GEO Group and CoreCivichas increased by almost 70% since November 4th.

The gains highlight the enormous opportunity investors see in private prison operators, dovetailing with Trump’s pledge to detain and deport millions of migrants.

In 2021, President Joe Biden ordered the Justice Department to stop negotiating with private prison companies.

But Trump, who rescinded a similar order during his first term, is expected to reverse those policies and encourage new business as he seeks support for delivering on his immigration promises.

The President’s first actions focused on assemble a team that will be responsible for migration policya sign that this is probably a priority.

The dollar index is hovering near its highest level since April, rising more than 2% over the past week.

This is good news for American tourists traveling abroad, but it more mixed signal for the economy.

That’s partly because the dollar’s strength is closely tied to interest rates, which investors now expect will remain higher than expected.

That’s partly a reflection of pre-election data indicating the U.S. economy is stronger than previously thought.

But investors also believe lower taxes, reduced immigration and new trade barriers could continue to weigh on inflation, causing reluctance of the Central Bank to reduce interest rates

Last week, the Federal Reserve gave few forecasts for the coming months, saying it was too early to tell what impact Trump’s policies might have.

Subscribe here Sign up for our new newsletter to receive a roundup of our best stories of the week every Friday.

And remember that you can receive notifications in our application. Download the latest version and activate them.