Why Tesla, crypto and prisons are Trump trade winners | Global News Avenue

Financial markets welcomed Donald Trump’s victory in the US presidential election with strong gains.

That’s despite considerable debate over how Trump’s plans for tariffs, tax cuts and mass immigrant deportations might impact the world’s largest economy.

A week later, the rally appears to have finally subsided. The three major U.S. stock indexes, which have risen about 5% since November 4, the day before the election, closed lower on Tuesday.

Here are some companies that stand out as investors try to predict what the next four years might bring.

Tesla shares have risen about 35% since November 4.

The rise pushed the company’s market capitalization back above $1 trillion for the first time since 2022 and increased the wealth of boss Elon Musk, who owns about 13% of the company, by more than $50 billion .

That signals investor bets that the Trump administration may ease some of the safety regulators’ investigations into features like self-driving.

The relationship between Trump and Musk could also help Tesla navigate shifting relations between the United States and China, where the company has significant influence.

While Trump is widely expected to reduce government support for electric vehicles, such as tax credits, analysts say that could actually benefit U.S. market leader Tesla, making it harder for rivals to catch up.

Following Trump’s victory, the price of Bitcoin, the best-known cryptocurrency, rose more than 25% this week to reach a record high, briefly exceeding $89,000.

The gains suggest investors expect big changes in an industry that faces a crackdown from regulators under the Biden administration warning it is riddled with hucksters and fraudsters.

Trump has also called cryptocurrencies a scam, but he changed his stance during this year’s campaign, pledging to make the United States the “cryptocurrency capital of the earth.”

He said he would build a strategic Bitcoin stockpile and fired SEC Chairman Gary Gensler, who sparked outrage by taking legal action against the company under existing financial laws.

Cryptocurrency companies insist their industry should be subject to new, tailored rules. That may depend on Congress, where they may also get a friendlier hearing this year.

Shares of some of the largest U.S. banks have posted double-digit gains since the day before the election as investors bet financial companies will be among the most direct beneficiaries of Trump’s pledge to deregulate.

Among other issues, he will now have a say in setting pending rules governing how much cash banks must keep as financial buffers.

Trump is also expected to part ways with current FTC Chair Lina Khan, who is known for her antitrust views and has been accused of having an impact on dealmaking, a key part of the bank’s business.

Capital One and Discover’s shares have risen more than 15% since the merger was announced, as the merger is under regulatory review.

Shares of leading publicly traded prison companies GEO Group and CoreCivic have risen about 70% since Nov. 4.

The gains suggest investors see a huge opportunity for private prison operators as Trump vows to round up and deport millions of immigrants.

In 2021, President Joe Biden ordered the Justice Department to stop doing business with private prison companies.

But Trump, who reversed a similar order during his first term, is expected to reverse that policy and push for new business as he seeks help to fulfill his immigration promises.

Trump’s first actions as president have focused on assembling a team responsible for immigration policy, a sign that this may be a priority.

The U.S. dollar index is hovering at its highest level since April, having gained more than 2% last week.

That’s good news for American tourists traveling abroad, but a more mixed signal for the economy.

Part of the reason is that the dollar’s strength is closely tied to interest rates, which investors are now betting may remain at higher levels than previously expected.

It partly reflected pre-election data that suggested the U.S. economy was stronger than previously understood.

But investors also see a risk that tax cuts, reduced immigration and new trade barriers could put continued pressure on inflation, making the Fed more reluctant to cut interest rates.

Last week, the Fed offered little guidance for the coming months, saying it was too early to tell what impact Trump’s policies might have.