Trump Stocks: What to Buy If Trump Wins Tuesday

Written by Jason Simpkins
Posted October 30, 2020

Yesterday, Jimmy Mengel told you where to go looking for 'buys' if Joe Biden wins the presidency on Tuesday night. 

Today, I'm here to follow up by telling you what sectors and companies will most benefit from a Trump victory. 

To be honest, this isn't my first rodeo. 

I wrote a similar story back in 2016, and several of the stocks I listed have done very well for themselves. 

Chief among them are the big banks — Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS), and JP Morgan (NYSE: JPM).

JP Morgan and Morgan Stanley have done especially well, climbing 41% and 47%, respectively, while Goldman has lagged behind with a mere 7.5% gain.

The reason for the climb is simple: Donald Trump packed his cabinet with Wall Street insiders, defanged the SEC, deregulated the industry, and passed a massive tax cut. 

This is a trend that will undoubtedly continue if Trump were to be re-elected. He personally favors the industry, and while his cabinet has experienced a high rate of turnover, Treasury Secretary Steve Mnuchin (a former partner at Goldman Sachs and former hedge fund manager) and Commerce Secretary Wilbur Ross (a billionaire vulture capitalist) continue to serve uninterrupted. 

Make no mistake, Wall Street wins in a Trump presidency. 

Another sector that Trump favors is the defense sector. 

In fact, two of the country's biggest defense contractors, Lockheed Martin (NYSE: LMT) and Northrop Grumman (NYSE: NOC), are up 48% and 30% since the 2016 election. 

This is because President Trump drastically increased the defense budget, ramping it up to a peak of $738 billion for FY2020. 

It's also because Trump has put a lot of pressure on U.S. allies to increase their defense spending as well. He's even gone so far as to instruct diplomats to act as traveling salesmen for the defense industry, culminating in a $12.5 billion arms deal with Saudi Arabia in 2018.

Furthermore, with Trump's laser-like focus on domestic security, CACI International (NYSE: CACI), which provides IT and network solutions to customers in the areas of defense, intelligence, and homeland security, has doubled in value since the 2016 election. 

It would likely continue to find success in Trump's second term, as well. 

And finally, here's one you might not see coming: fast food.

Back in 2016, I noted that Trump had appointed Andrew Puzder, the chief executive of Hardee’s and Carl’s Jr. (technically brands of CKE Restaurants), as secretary of labor. Puzder was a vocal critic of President Obama’s labor policies, lambasting him for expanding overtime pay for workers and for trying to raise the minimum wage.

However, he failed to secure Senate confirmation, and ultimately the job went to Alexander Acosta, who resigned last year after being scrutinized for approving a plea deal that allowed Jeffrey Epstein to avoid federal prosecution for child sex-trafficking.

The position has since been filled by Eugene Scalia — the son of former Supreme Court Justice Antonin Scalia, and a corporate lawyer who has a record of arguing against labor rights.

Under his stewardship the Labor Department made it easier for firms not to pay workers for overtime, for restaurants to shortchange waiters on tips, and for firms to avoid paying sick leave.

He expanded the definition of "independent contractor" to make it easier for companies (like Uber) to use contract labor to avoid paying minimum wage, overtime pay, and other benefits.

And he intervened in a major Labor Department lawsuit against Oracle, which was being investigated for systematically underpaying women and people of color, pushing for a settlement sum that the career officials involved in the case considered far too low.

In short, he's a tremendous boon for big corporations with large numbers of low-paid employees. 

He'll continue to ensure companies like McDonald's (NYSE: MCD), which has doubled in value since Trump's election, can continue to exploit their labor forces.

Like I said, all of these stocks have done especially well under Trump's first term, and they'd undoubtedly continue to benefit from a second. 

Fight on,

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Jason Simpkins

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Jason Simpkins is Assistant Managing Editor of the Outsider Club and Investment Director of The Wealth Warrior, a financial advisory focused on security companies and defense contractors. For more on Jason, check out his editor's page. 

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