The likely winners and losers in Trump presidency

A second presidential term for Donald Trump brings with it stark uncertainty in areas ranging from global trade to his approach to wars in Gaza and Ukraine.
There is, however, enough confidence that his victory will mean tax cuts and increased tariffs that there has already been an impact in global markets, with consequences for many UK and European companies.
In particular, US Treasury 10-year bonds had their biggest one-day rise in yield since April on the back of expectations that Trump’s policies will increase US budget deficits and stoke inflation. This could mean rate cuts from the Federal Reserve are less likely, and higher US Treasury yields often lead to higher global interest rates.
They also strengthen the US dollar, which lifts the share price of UK companies that generate a significant proportion of their income in the currency. In the longer term, a stronger US dollar can have significant implications for UK inflation and consumer demand.
There is also likely to be fallout for everything from defence stocks to car manufacturers and energy companies and global trade flows on the expectation that a Trump will roll back subsidies and levy tariffs on Chinese imports. Here are some of the likely winners and losers from a return to a Trump White House.
BAE Systems (+4.9 per cent), Rolls-Royce Holdings (+2.5 per cent), Rheinmetall (+3.2 per cent)
On one hand, Trump’s warnings that he will scale back US military support in the region and push Nato members to spend more on defence could be a boon for the likes of Rolls-Royce and BAE Systems, James Hurley writes. There is also the possibility that his win adds to geopolitical tensions. Then there’s the fact that countries need to refill stocks depleted by the war.
On the other, however, if Trump is successful in his pledges that he can bring about a rapid end to war in Ukraine, defence stocks could be hit by a marked decline. Shares in Germany’s Rheinmetall have risen by about 360 per cent since Russia’s invasion in 2022, while BAE is up more than 110 per cent. Any sell-off may be a buying opportunity as analysts are expecting growth in the industry in the coming years.
On Wednesday, the immediate reaction from investors was positive.
Ferrexpo (+27.3 per cent)
Ferrexpo, one of the largest exporters of iron ore in the world, enjoyed a more marked rise, Helen Cahill writes. The mining group has its operating base in central Ukraine and has been forced to cut back on production significantly following Russia’s invasion.
The group runs three mines in central Ukraine and suspended work owing to missile strikes on electricity networks towards the end of 2022. Trump has repeatedly pledged to end the conflict in “in a day”, and in his victory speech, the new president said he would “stop wars”. Ferrexpo’s share price jumped as investors bet on Trump following through on his promise.
• US election results live: Trump beats Kamala Harris in historic comeback
Ashtead (+5.6 per cent), Entain (+3 per cent), Watches of Switzerland (+2.1 per cent)
An appreciating US dollar recalibrates the global economy, Jack Barnett writes. It can raise inflation in emerging markets by increasing the cost of imports, force central banks to leave borrowing costs higher to protect their own currencies and push down oil prices.
Under a second Trump presidency, the dollar is likely to perform well against other developed country currencies thanks to the Federal Reserve leaving interest rates higher to quash tariff-related inflation. Higher deficit spending to fund potential income and corporation tax cuts would also raise the chances of tighter monetary policy.
For international companies that generate income in US dollars, an appreciating greenback is a boon. Ashtead, an equipment rental firm in the FTSE 100 index, Entain, the bookmakers, and Watches of Switzerland all saw their share prices rise.
This dollar-earning trio will receive a large return when exchanging their dollar earnings into other developed market currencies, meaning they can invest in assets denominated in those currencies at a lower cost. This can improve profits and open up new opportunities for growth.
BAT (+0.7 per cent)While a Trump presidency is expected to herald a deregulatory and protectionist agenda, there are expectations that his administration could clamp down on the regulation of the vapes market, to the benefit of big tobacco, Alex Ralph writes. British American Tobacco, the FTSE 100 manufacturer which owns Reynolds American as well as the e-cigarette brand Vuse, has lobbied for regulators to tighten enforcement against imports of Chinese vapes.
BAT this summer blamed the illicit market in the US for the company delaying a headline target to generate £5 billion of revenue from new categories next year. Shares in BAT rallied as much as 4 per cent on the London Stock Exchange today, before paring gains as the wider market rally cooled.
• Donald Trump wins US election 2024 to become 47th president
Orsted (-10.7 per cent), Ceres Power, (-5.4 per cent)
The inflation reduction act, which includes huge subsidies for green energy, is one of the most widely expected casualties of a second Trump presidency, with Republicans likely to roll back the legislation as much as they can, James Hurley writes. That means a hit to stocks in the renewable energy industry.
The price of copper is a good indicator for sentiment towards renewable assets as it is a critical component for the cables that take electricity generated by wind and solar farms to users. The metal was down by close to 5 per cent by early Wednesday afternoon.
Orsted, the Danish developer and operator of wind and solar farms and battery storage projects, whole largest offshore wind market is the UK, was down 10.7 per cent. Trump has been a vocal critic of offshore wind, claiming that they drive whales “crazy” and saying he planned to scrap projects on “day one” of his presidency. Orsted has projects in the US but its chief executive has called the country “the most painful part of our portfolio”.The turbine manufacturer Vestas, also Danish, and Nordex, a wind turbine maker, also suffered sharp declines. Ceres Power, a UK developer of green hydrogen technology and fuel cells, suffered a modest dip.
Fidelity Special Situations (-2.7 per cent)Trump’s pledge to impose 60 per cent tariffs on imports of Chinese goods to the US had an instant chilling effect on the FTSE’s most prominent investor in the country, Simon Freeman writes. Shares in the FTSE 250 Fidelity China Special Situations fund lost as much as 3 per cent of their value even as rival funds were lifted by his victory.The £1.1 billion fund’s main holdings include Tencent, the tech investor behind the WeChat messaging platform, self-driving car company Pony.AI and insurance group Ping An.
The return of Trump to the White House put a sudden halt on what has been a strong rally for FCSS over the past couple of months.Analysts are divided over whether that caution is justified. During his previous presidency, tough talk of tariffs was not matched by action. The US is now a less important export destination for China, with exports down from 18.2 per cent to 14.3 per cent of the total. A new stimulus package, due to be announced after this week’s National People’s Congress, is now considered likely to be more aggressive than a previously forecast $1.4 trillion.
BMW (-6.6 per cent), Porsche (-3.7 per cent), Volkswagen (-4.3 per cent)
There are concerns in Germany that it could lose out on car manufacturing to the United States due to Trump’s threat of tariffs on imports from the bloc, Emma Taggart writes. Hildegard Müller, president of the German Association of the Automotive Industry, said: “It is now all the more necessary for us in Germany and Europe to do our own homework, including with regard to the competitiveness of the location.”
Car manufacturing is Germany’s biggest industry and the country exported 400,000 cars to the US last year. She added that the EU needed to improve its competitiveness and warned that car manufacturers would come under pressure to relocate across the Atlantic if tariffs were imposed.
Trump is also expected to abandon or curtail subsidies for electric vehicles under the inflation reduction act. This is anticipated to weigh on European car manufacturers as sales of electric vehicles could fall in favour of petrol and diesel cars.
The European Stoxx600 auto and parts sector index fell 2.3 per cent.