The winners and losers of Trump 2.0

NEW YORK TIMES

What now?

In the end, it wasn’t all that close. Donald Trump has reclaimed the presidency, besting Vice President Kamala Harris in what has been one of the most expensive elections in U.S. history.

“America has given us an unprecedented and powerful mandate,” Trump told jubilant supporters this morning at his campaign headquarters at Mar-a-Lago. Indeed, the strength of Trump’s victory — he made inroads into most major voter demographics, and helped Republicans retake the Senate — has drastic implications for the American economy and the corporate world at home and abroad.

Stocks and other asset classes, including crypto, are surging on the hopes of a more business-friendly Washington. (More on that below.) But the return of Trump also heralds a new class of business winners, along with potentially transformative changes in fiscal policy, federal regulation and more.

Here’s what could come next.

Businesses will probably face fewer burdens. Driving much of the jump in a wide array of stocks and cryptocurrencies is the belief that a second Trump administration will ease regulation, especially for energy companies, financial firms, digital currencies and more.

Expect Trump, aided by Republican control of the Senate and possibly the House, to extend the 2017 tax cuts for businesses and the wealthy that are set to expire next year. Whether Trump will go forward with more expansive initiatives, such as eliminating taxes on tips and overtime — or even cutting income taxes generally — remains to be seen.

But there are wild cards as well:

• How will Trump deal with antitrust? Many corporate leaders have hoped that a Republican White House would undo the Biden administration’s effort to jack up competition policy. But JD Vance, Trump’s running mate, has praised Lina Khan, the chair of the F.T.C., for her efforts to crack down on the tech giants that conservatives have criticized for years. While Khan probably wouldn’t continue on in the second Trump administration, her tough-on-tech stance might endure.
• Will Trump give Robert F. Kennedy Jr. real political power? The president-elect has said Kennedy, a key backer who has divisive views on health and food policies, could “go wild” on health. Trump has already suggested that he’d be OK with moves including removing fluoride from drinking water. Agricultural groups have reportedly pressed the Trump camp on any potential changes to policies on pesticides and other farming practices.

Companies are already treading carefully. Trump has boasted of hearing more from prominent C.E.O.s such as Sundar Pichai of Alphabet, Tim Cook of Apple and Mark Zuckerberg of Meta. Trump associates have interpreted that as corporate leaders trying to make nice with him, lest they end up being the target of his ire, like John Deere.

While former corporate leaders publicly opposed Trump’s re-election effort, current C.E.O.s, including normally outspoken ones like Warren Buffett of Berkshire Hathaway, have stayed quiet for fear of blowback against their companies.

The future of the Fed’s political independence is unclear. Trump has said repeatedly that the president should have a greater say in the central bank’s rate-setting policy, a stance that hardened after he repeatedly criticized Jay Powell, the Fed chair. It’s uncertain if Trump has the legal authority to change the Fed’s independence or fire Powell, but with his return to power, he may try to make it happen.

A key Trump economic adviser, the financier Scott Bessent, has already proposed a way to undercut Powell’s authority by effectively appointing a shadow chair. (Skeptics have warned that such a move could introduce chaos into the markets.)

Will more trade wars erupt? Trump has embraced the idea of expansive levies — “tariff,” he proclaimed recently, “is the most beautiful word in the dictionary” — as a way to promote domestic industry and punish allies and rivals alike. China and Europe are already bracing for the potential fall out.

Will he follow through? “Markets appear to assume that the campaign rhetoric (specifically around deportations and tariffs) will not fully translate into policy,” Paul Donovan, the chief economist of UBS global wealth management, wrote in a recent note.

Concerns about the nation’s fiscal health may continue. Analysts have said that Trump’s policies could significantly add to the federal debt. That could make the Treasury and bond markets potential regulators on how far a second Trump administration’s economic moves can go.

Meanwhile, Larry Fink of BlackRock wrote in a Wall Street Journal opinion article that the nation needed at least 3 percent annual economic growth over the next five years to keep the debt-to-G.D.P. stable.

The post-election bounce

The Trump trade is storming global markets. Investor fears of a disputed election have been overtaken by bets that Donald Trump’s return to the White House will mean less regulation, lower corporate taxes and a boost to profits.

But the money flows are exposing a new world order of winners and losers. Bank and energy stocks on both sides of the Atlantic are gaining, while companies associated with the green energy transition are in the red. Fears of a trade war are hitting shipping companies. And investors are selling off U.S. bonds.

The gainers: Stock futures are zooming, and the S&P 500 looks set to open at a new high. Bitcoin was in record territory this morning, as crypto bulls hope a Trump administration will be friendlier. The dollar is gaining on global currencies, especially the euro and Mexican peso, with worries that they could be on the front line of a Trump tariff barrage.

Today’s winners:

• Elon Musk’s Tesla rose nearly 12 percent, and Trump Media & Technology was up 37 percent in premarket trading.
• The Russell 2000 index, a favorite among Trump-trade bulls, climbed more than 5 percent in premarket.
• Bitcoin topped $75,000, before easing back. Shares in Coinbase, the crypto exchange that was one of the biggest corporate donors this election cycle, soared. So did the stock of Argo Blockchain, a London-listed Bitcoin miner.

Some losers:

• The shipping giant Maersk was down more than 5 percent.
• Vestas Wind Systems and RWE, two big European renewable energy companies, fell sharply on concerns that Trump will scale back the Inflation Reduction Act.
• Yields on Treasury notes soared, adding to fears that Trump’s economic policies will push up inflation and the dollar, and sap global growth.

All eyes are on central banks as Fed officials gather today for a two-day rate-setting meeting. A more protectionist economic policy could scramble the foreign exchange, inflation and growth dynamics.

The futures market this morning dialed back slightly the odds for Fed rate cuts next year, and Deutsche Bank analysts saw the European Central Bank speeding up the pace of cuts.

Musk, government czar?

One of the biggest winners from the presidential campaign is Elon Musk, who spent well over $100 million and turned his X feed into a megaphone for Donald Trump.

Trump gushed about the billionaire entrepreneur in his victory speech this morning. “A star is born,” he beamed.

How far will that star power take him? Trump has repeatedly said that Musk would wield significant influence if he won, with a focus on cutting the federal budget. (The tech mogul has jokingly called this work the “Department of Government Efficiency,” and yes, it’s an allusion to a meme.) And Musk businesses including SpaceX and Starlink — which already have an array of government contracts — may be in line to benefit from his access to the president, especially as Musk has complained about being hamstrung by regulations.

But DealBook has some questions:

• Could Musk have a say in policy around electric vehicles, autonomous driving and artificial intelligence? Trump has signaled that he would pull rebates on subsidies for E.V. purchases, a move that would most likely hurt car makers trailing Tesla in the electrification race.
• How would a Trump-Musk alliance influence trade policy with China? Trump is a noted hawk on China, calling for tariffs of 60 percent or more on imports originating from the country. But China is also key to Tesla’s growth strategy. Could Musk talk Trump out of going too tough? Beijing is probably happy to have someone so dependent on China close to the heart of power.
• What about X? Trump Media & Technology Group, the parent company of Truth Social, is rallying this morning on investor hopes that the Trump victory will bolster its shaky revenue stream. Could that extra competition be bad news for X, which has seen an advertiser exodus since Musk bought it?

“Congrats @realDonaldTrump. You won fair and square. Congrats to @elonmusk as well. #Godspeed”

— Mark Cuban, the tech entrepreneur who campaigned hard for Vice President Kamala Harris.

A big night for prediction markets

Proponents of prediction markets such as Polymarket, Kalshi and PredictIt, where bettors could wager on the outcome of the election, said they reflected reality faster and better than opinion polls. With Donald Trump’s resounding win, those claims seem to have been borne out.

“History was made today,” Shayne Coplan, the C.E.O. of Polymarket, wrote on X, claiming that “the Trump campaign HQ literally found out they were winning from Polymarket.”

The average odds from five political betting markets — Betfair, Kalshi, Polymarket, PredictIt and Smarkets — showed Trump with better-than-a-coin-flip odds heading into Election Day, according to the aggregator site Election Betting Odds. By the time polls closed, the chances of a Trump victory shot up. (Worth noting: Polls measure how voters plan to vote, while prediction markets track the odds that a candidate will win implied by bets on the platform.)

Prediction markets started reflecting a likely Trump win several weeks ago, even as opinion polls showed the race was neck and neck. That’s despite questions about potential manipulation of such markets, notably with the emergence of a French trader who for a time cornered the market for the pro-Trump contract on Polymarket.

Others have sought to get in on the action. Interactive Brokers and Robinhood set up their own political betting markets over the past month.

Separately, investor interest in the business is growing, with Polymarket working to close a $50 million fund-raising round that would value it at $300 million. (It’s already backed by Peter Thiel’s Founders Fund.)

The next big thing for the industry: how a federal appeals court rules on the Commodity Futures Trading Commission’s efforts to prevent Kalshi from offering U.S. election betting.

THE SPEED READ

Deals

• NielsenIQ, the consumer research company, is reportedly weighing going public next year at a valuation near $10 billion. (Bloomberg)
• Perplexity, which runs an A.I.-powered search engine, is said to be finalizing a fund-raising round that would triple its valuation from a few months ago to about $9 billion. (WSJ)

Elections, politics and policy

• “Four More Years of Unpredictability? The World Prepares for Trump’s Return.” (NYT)
• Rudy Giuliani cleared out most of his apartment in an apparent attempt to further delay efforts by Georgia poll workers to collect on a $148 million judgment imposed on him. (NYT)

Best of the rest

• Goldman Sachs is said to be considering promoting its biggest class of partners in at least four years. (Bloomberg)
• Andy Jassy, Amazon’s C.E.O., reportedly told employees that the company’s stricter return-to-office requirement was not a “backdoor layoff” tactic. (Reuters)
• Bernie Marcus, the Home Depot co-founder who helped turn a do-it-yourself hot spot into a multibillion-dollar enterprise, died on Monday. He was 95. (NYT)

The post The Winners and Losers of Trump 2.0 appeared first on New York Times.