Predicted winner & loser stocks should Trump regain presidency

Oil and gas producers, chipmakers, and regional banks will be the biggest share price gainers should Donald Trump emerge victorious in the upcoming US presidential election, according to new analysis from Australian equity investor firm Plato Investment Management.

The quantitative analysis, conducted by Plato, a Sydney-based equity investment specialist, and using a proprietary stock price measurement method intended to avoid inherent political biases, promises “the most explicit, unbiased gauges of how stocks could react to either a Trump or Harris victory”.

Among Plato’s top 10 performers should Trump regain the presidency include oil and gas services companies Helix Energy Solutions, Oceaneering International, Halliburton and Barker Hughes.

Semiconductor manufacturers or adjacent firms Micron, Marvell, Broadcom and Magnificent Seven star performer Nvidia were also expected to continue their bullish gains.

“The inclusion of several semiconductor companies may seem surprising, given Trump’s mixed stance on Taiwan and potential trade restrictions. However, these companies have a high beta, meaning they tend to outperform the market when it rises,” wrote Dr David Allen, portfolio manager of the Plato Global Alpha Fund.

Regional US banks Heartland Financial and Western Alliance rounded out Plato’s top 10 predicted gainers.

Both oil and gas and regional bank stocks were set to benefit from Trump’s expected cutting of regulations and lowering of interest rates, according to Pluto, as well as his “well-known opposition to green energy”.

Each of the top 10 predicted gainers are based in the US.

The biggest potential losers were more diverse, consisting of gold-oriented firms, renewable energy, metals and mining services, and movies and entertainment makers, spanning the US, Canada and Australia.

Gold stocks (including Australia’s De Grey and St. Barbara, Canada’s B2Gold, Wesdome Gold Mines and NovaGold) were likely to take the biggest hit, making up five of the top 10 stocks likely to lose the most should Trump win.

“A Trump presidency, characterised by deregulation and tax cuts, could spur economic growth, creating a headwind for gold, traditionally a safe-haven asset,” Allen wrote.

The appearance of Warner Bros. Discovery within the top 10 is attributed to its parent company owning CNN, “a long-time Trump antagonist”, Pluto notes.

Trump’s anti-green agenda will also weigh heavily on renewable electricity stocks, notably NextEra Energy and Brookfield Renewable, while DexCom, a medtech developer, would also likely take a big hit, according to Pluto.

Plato’s proprietary analysis method was based on correlations between daily betting market movements and daily stock price movements of the largest 10,000 companies in developed markets.

Winner or loser stockers were categorised based on being either the strongest positive or strongest negative price movers when betting markets recorded a 30% increase in the probability of a Trump presidential win.

Allen noted the “uniquely objective approach” of Plato’s measurement method.

“Instead of relying on pundits, whose views are often tinted with red or blue, we have applied a more objective approach through the sort of analysis we regularly do as part of the Plato Global Alpha Fund investment process to avoid outsized losses.”

Current polls suggest a tight race for the White House, with a narrow 48% to 46% lead, in national polling for Kamala Harris over Donald Trump (as at 10 October), who is seeking his second term in office.

The 2024 US Presidential Election will be held on Tuesday, 5 November.