The stock market is preparing for an election victory for Donald Trump
Nothing has been decided in the early hours here, but a clear trend is emerging in the presidential race in the USA. Donald Trump was able to conquer the two swing states North Carolina and Georgia. The latter is particularly painful for the Democrats, as Joe Boden was able to gather a slim majority in Georgia in 2020.
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Some people celebrate, and that includes Elon Musk, who celebrated a victory on his short message service “X” during the night. The boss of Tesla (US88160R1014) is hoping for a place in a government under Donald Trump and the shareholders also seem to be preparing for good times. Tesla shares rose 3.5 percent on Tuesday and rose another 2.9 percent to $258.70 in after-hours trading. The markets are hoping for less regulation and falling corporate taxes if the Republicans win the election.
A renewed presidency by Donald Trump could be particularly painful for Tesla, as he doesn’t think much of renewable energies, electric cars and the like. So it’s quite possible that the exuberant celebratory atmosphere will be followed by a serious hangover. But only time can tell.
Nvidia is racing to the top
Investors are largely the same Nvidia (US67066G1040)who will win the race for the White House. In any case, the chip manufacturer is considered a profiteer. Both Kamala Harris and Trump want to strengthen chip production in their own country and lure manufacturers with nice subsidies. Both also see the area as a key industry. At Nvidia, you can sit back and relax as you look at the ongoing counts.
That’s exactly what the shareholders seem to be doing, as they pushed Nvidia shares up 2.8 percent yesterday and dared to jump above the $140 mark after trading. This increases the market capitalization to 3.4 trillion dollars and, at least at this moment, it is once again the most valuable stock exchange company on the planet.
Apple is falling behind
Slipped from first place again Apple (US0378331005)where market capitalization has slipped to a still impressive $3.38 trillion after minor corrections in recent years. The tech giant was able to show increasing iPhone sales again in its latest figures, but is still weak in China and things could become much more uncomfortable there in the future.
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If Trump actually wins the election, the markets will not only expect the trade disputes with China to continue. Instead, it is expected that various escalations will be observed under a President Trump who has become increasingly radicalized over the past four years. Sanctions could be followed by counter-sanctions and, in the worst case, could cause Apple’s important China business to collapse further. Panic is not yet spreading among investors. However, the prices fell slightly by 0.2 percent after trading.
Microsoft: A bargain?
It is now far behind in the race for the highest market capitalization Microsoft (US5949181045). Record prices just below $470 are now a long way off. At the close of trading on Tuesday it was “only” enough for $411.46. That sounds disillusioning, but it puts a smile on the faces of some bargain hunters. They are consciously betting that the current prices are just an entry opportunity. Efforts in the area of artificial intelligence are still clearly in the foreground.
Microsoft has not been able to produce any sensational news in the last few weeks. There are even rumors that there could be friction with key partner OpenAI. In the background, however, new AI solutions are still being worked on. The big question, however, is whether it will one day be able to generate sales that can justify the investments made in recent years. Optimists have no doubts about this, but the markets do not seem to be completely convinced at the moment.
The tension rises
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The result of the US election will have massive implications for the markets and will therefore be followed closely on the markets. When a final result might be available is still unclear. In general, observers expect an initial positive reaction on the US stock markets if Donald Trump wins the election, but this could be followed by unpleasant times in the long term. In the case of Kamala Harris, the opposite development is likely.
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November 6th, 2024 – Andreas Göttling-Daxenbichler
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