What Wall Street Says - Donnecommebernard

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Another four-year stay in the White House was confirmed.

Former President Donald Trump has won a second term as President of the United States after a strong showing in the election. He will be the nation's 47th president.

Importantly, Trump won the key battleground states of Pennsylvania, Georgia and North Carolina. A confirmed victory in Wisconsin – another swing state – surpassed Trump by 277 electoral votes early Wednesday.

After key victories in West Virginia and Ohio, Republicans will also take control of the Senate for the first time in four years. Control of the House of Representatives remained in limbo Wednesday afternoon.

The Dow Jones Industrial Average (^DJI) surged more than 1,300 points to a record 43,569 by midday as investors priced in tax cuts and other measures introduced by Trump. The S&P 500 (^GSPC) and the Nasdaq Composite (^IXIC) also recorded strong gains.

“I don’t know that it’s too much too soon,” Keith Lerner, Truist’s co-chief investment officer, said on Yahoo Finance’s Opening Bid podcast (video above; listen below). “When you think about this (election) happening, there was a real dispute between the (results). So once you get some clarity and it looks like the election is not going to be extended or is going to be a contested election, there's a relief rally.”

Trump's second round also triggered a number of important trades.

Tesla (TSLA) shares rose 14% to $286 during the session. The company's ticker page was the most active on Yahoo Finance by midday.

The win could put Tesla CEO Elon Musk in pole position to shape the future of electric vehicles given his strong support from Trump.

“Tesla has the scale and scope unparalleled in the electric vehicle industry, and this dynamic could give Musk and Tesla a clear competitive advantage in an environment without electric vehicle subsidies, coupled with likely higher tariffs in China that would continue to squeeze out cheaper Chinese electric vehicle suppliers. “(BYD, Nio, etc.) from flooding the US market in the coming years,” wrote Wedbush analyst and Tesla bull Dan Ives in a note to clients.

Bitcoin (BTC-USD) prices are also rising, with Trump campaigning on promises to make the US a digital currency superpower. The move also likely reflects investors' bet on an SEC shakeup that could result in a chairman friendlier to digital assets.

“With Trump leading the U.S. presidential race and Republicans likely to swing the Senate, we believe regulatory headwinds have turned into tailwinds for crypto and the market is far from accounting for this shift,” said Bernstein analyst Gautam Chhugani.

Meanwhile, the 10-year Treasury bond is rising. Experts believe Trump's desire to raise tariffs on imports and cut taxes could spur inflation, which could slow the pace of interest rate cuts by the Federal Reserve.

“Overall, however, we believe a Trump victory means higher inflation in the near term compared to the status quo with Harris, but slower growth (perhaps a reduction in GDP of up to 0.5 percentage points in 2025 and 2026),” says Rich, head of global strategy at TD Kelley wrote. “As far as FOMC policy is concerned, we expect the Fed to continue easing this year, but will likely pause in the first half of 2025 as it waits to get a better sense of the impact “The new government’s policies focus on inflation and growth.”

Here's what Wall Street said in the opening offering on some key issues following Trump's historic victory.

“The Fed is important, but it probably isn't as important as it used to be. Markets are still pricing the probability of a rate cut at over 90%? What does this mean for inflation and interest rates? If we look at all of that together, it probably means that whatever path the Fed takes, they're going to move a little slower when we have a little bit stronger growth. a little more inflation, but overall I would prefer a strong economy supporting earnings over an economy that needs further rate cuts because it is weakening.

https://finance.yahoo.com/videos/series/opening-bid/

If Elon Musk Leads DOGE, It Could Unnerve Tesla Stock: Analyst

“Tesla was one of the shorts I suggested last week if Harris had won. That's clearly not going to happen. It's all about Musk and what Musk is going to get. And whether Musk gets that role in a government efficiency ministry, they sort out the whole autonomous driving thing, and then that will finally be something that you can say is really different and valuable at Tesla.

“I suspect this is probably a refresher policy that will not last. There are some fantastic things that could very well happen for Musk in a new administration. And one of the things I kind of jokingly commented on last week is: Imagine that in Trump's second year, Musk, with his undoubted abilities, saves the ailing Boeing, joins forces with Musk's SpaceX and creates something new and really exciting.

“Definitely buy (the “Magnificent 7,” which consists of Apple, Microsoft, Google parent Alphabet, Amazon, Nvidia, Meta and Tesla), absolutely 100%. I mean, that's pretty much the only area that's seeing strong earnings growth anywhere.” In a world where money is flowing into stocks, I just don't see any earnings power.

Three Times a Week, Editor-in-Chief of Yahoo Finance Brian Sozzi offers insightful conversations and chats with the biggest names in business and markets Opening bid. You can find more episodes on our Video Hub or look at yours preferred streaming service.

Brian Sozzi is Editor-in-Chief of Yahoo Finance. Follow Sozzi on X @BrianSozzi and further LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email [email protected].

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