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President Biden has dropped out of the battle against Donald Trump.
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This can spark a shift in investor strategies that are now considering the growing chances of a Trump victory.
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In the ever-changing political landscape, let's consider 4 stocks that will benefit if Trump wins.
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Last week, in a rare event unseen since April 1999, the S&P 500 tumbled while the Dow Jones Industrial Average surprisingly rose by about 4.4%.
This divergence suggests a potential shift in investor strategies, reflecting ongoing portfolio adjustments as the political landscape changes.
With President Biden no longer running for re-election and the likelihood of a Trump victory increasing, market participants are likely to reevaluate their positions.
Fed fund futures are now firmly priced for at least two rate cuts by year-end, despite the next Fed meeting not taking place until July 30th and 31st.
This strong expectation of imminent rate cuts has spurred investors to rotate out of technology stocks – locking in capital gains after a stellar run – and into sectors positioned to benefit from a more accommodative monetary policy.
These cheaper sectors, lagging behind tech's recent surge, presented a compelling opportunity for investors seeking value. As a result, the recent days have seen a significant sell-off in big tech stocks.
But how can you adjust your positions based on the changing political scenario as President Biden drops out of the race and the probability of a Trump victory grows?
Below, we will discuss 4 stocks to buy from different sectors that could benefit if Trump wins.
4 Stocks to Watch if Trump Wins
As Donald Trump leads the polls for the upcoming U.S. Presidential election, investors are eyeing stocks that could benefit from his potential victory. Here are four stocks to keep on your radar:
1. First Solar
First Solar (NASDAQ:FSLR) manufactures and sells solar photovoltaic modules using advanced semiconductor technology. Based in Tempe, Arizona, this company, founded in 1999, has a fair value of $290.58—36% above its recent closing price of $213.50. Analysts predict the stock has an average potential target of $286.
2. Albemarle
Albemarle (NYSE:ALB) is a leading lithium producer serving the energy storage, consumer electronics, construction, and pharmaceuticals markets. Established in 1887 and headquartered in Charlotte, North Carolina, Albemarle’s fair value is $112.29, which is 19.7% above its closing price of $93.75. The stock's average potential target is $135.75.
3. MP Materials
Operating the Mountain Pass rare earth mine and processing facility in North America, MP Materials (NYSE:MP) is based in Las Vegas, Nevada, and was founded in 2017. The market has set an average price target of $22.96, significantly above its recent closing price of $14.47.
4. MicroStrategy Incorporated
As the largest corporate holder of Bitcoin, MicroStrategy (NASDAQ:MSTR) stands out in the crypto space. Trump's favorable stance on digital currencies and blockchain technology could benefit this company. The market estimates its average price target at $1960, compared to its recent closing price of $1555.
Investor Sentiment (AAII)
Bullish sentiment, i.e. expectations that stock prices will rise over the next six months, increased 3.6 percentage points to 52.7% and is above its historical average of 37.5%.
Bearish sentiment, i.e., expectations that stock prices will fall over the next six months, is at 23.4%, below its historical average of 31%.
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Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, counsel or recommendation to invest as such it is not intended to incentivize the purchase of assets in any way. I would like to remind you that any type of asset, is evaluated from multiple perspectives and is highly risky and therefore, any investment decision and the associated risk remains with the investor.