Experts: 3 Stocks That Could Plummet in Value If Trump Wins
The 2024 presidential election is closing in, and there’s a lot of buzz and worry about how the economy and stock market could shake out if Donald Trump takes the White House again.
When all is said and done, the president — no matter who it is — doesn’t affect the market very much. Other economic factors that are out of any one person’s control generally play a much larger role.
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During Trump’s presidency, the stock market performed well overall, with the Dow Jones Industrial Average returning an annualized gain of 12%, while the S&P 500 returned 67%. While this performance was positive, it was below the annualized returns of Presidents Clinton and Obama.
While some industries might align with Trump’s agenda during a potential second term, others could find themselves in hot water. Here’s a look at how some major players could fare under a potential second Trump presidency.
Vestas Wind Systems (VWDRY)
Vestas Wind Systems, the Danish wind turbine manufacturer, could face trouble under another Trump term. According to Bloomberg, before Trump was elected, there was a lot of speculation about how his attitudes about wind turbines and other renewable energy sources would affect companies like Vestas.
Between January 2017 and January 2020, Vestas’ stock did not decline. It actually showed an increase of 62%, just slightly underperforming the market during that period. Nevertheless, that has not stopped the same speculation from recurring this time around.
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“During Trump’s previous term, the emphasis on traditional energy sources posed difficulties for renewable energy policies,” said Artem Minaev, co-founder of CryptoDose. “Companies in the solar and wind energy sectors, like First Solar and Vestas Wind Systems, might encounter headwinds if Trump leans towards policies favoring fossil fuels.”
Vestas’ fortunes are closely tied to broader policies toward renewable energy sources. Even if Trump doesn’t directly undermine incentives for clean energy and prioritize fossil fuels, speculation that he might do so could potentially deflate its stock value.
Smith & Wesson Brands, Inc. (SWBI)
Smith & Wesson, one of the most prominent American firearms manufacturers, could find itself in an interesting position under a potential second Trump term. The firearms industry tends to be sensitive to political changes. Trump’s stance on guns is typically seen as favorable for gun manufacturers, which should have meant big growth for companies like Smith & Wesson. However, Smith & Wesson’s stock dropped about 60% during Trump’s presidency.
“Gun sellers like Sturm, Ruger and Co, Smith and Wesson, have a counter-cyclical relationship with elections,” said Cameron Fen, an economist and an author at Seeking Alpha. “When a Democrat is elected, gun owners worry about their rights being curtailed and are more interested in establishing militia-like groups. However, when a Republican is in office, this anxiety is much less pronounced and fewer guns are purchased. This trend has taken place since the turn of the century.”
Trump’s gun-friendly rhetoric may actually have a dampening effect on demand. The market won’t get the same surge that typically occurs when gun owners feel their rights are under threat, which may mean investors’ money would perform better elsewhere.
Western Union (WU)
A leader in cross-border money transfers, Western Union could face challenges under a potential second Trump presidency. The company’s performance is closely tied to immigration policies and trade relations. Trump’s previous term was marked by a stance on immigration, including restrictions on travel from certain countries and efforts to limit undocumented immigration.
“Money transfer companies like Western Union and Moneygram could also be hurt as the crackdown on immigration would reduce the demand for remittances to be sent back home for immigrants,” Fen said.
During Trump’s term, Western Union underperformed the market as a whole, with the stock showing a return of just 22%. If Trump embarks on a second term with a similar immigration stance, Western Union could face more headwinds threatening its business.
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This article originally appeared on GOBankingRates.com: Experts: 3 Stocks That Could Plummet in Value If Trump Wins
