The Trend

The Trump Effect: How the POTUS Impacts Your Trades

Apparently, he has the Midas touch.

Infrastructure stocks exploded on President Trump’s trillion-dollar promise.  For example, H&E Equipment (HEES) flew from $12.40 to $27 as a result. 

Cement stocks popped on promises to build a Mexican wall.  As a result, stocks like Martin Marietta (MLM) ran from $178 to a high of $242.  Then, after signing a new executive order on cyber security in early May 2017, related stocks, like FireEye (FEYE), Palo Alto (PANW) and Check Point (CHKP) soared.

Even banking trades, like the XL F ETF exploded on the idea of deregulation.

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But some of the biggest movers in late May 2017 on the POTUS effect were U.S. defense stocks.  Nearly every one of them exploded higher after Trump inked a weapons deal with the Saudis worth nearly $350 billion over the next 10 years.

  • Raytheon ran from $156 to $162.50
  • Boeing (BA) ran from $175 to $184
  • General Dynamics (GD) ran from $191 to $199
  • Northrop Grumman (NOC) ran from $243 to nearly $252

“This package of defense equipment and services support the long-term security of Saudi Arabia and the Gulf region in the face of Iranian threats, while also bolstering the Kingdom’s ability to contribute to counter terrorism operations across the region,” according to the White House, as quoted by CNBC.

Reportedly, the deal will include the sale of everything from tanks and ships, to missiles, helicopters, and THAAD missiles made by Lockheed Martin (LMT), which just ran from a recent low of $267 to $278.  All on the heels of a significant deal with Saudi Arabia.

Better yet, at the time, there was speculation that the deal could lead to big jobs growth form Americans.  In fact, according to Bloomberg, the Saudis could invest up to $40 billion just to assist with the U.S. infrastructure program.

Truth is – spotting similar opportunities isn’t tough.

Just be aware of his schedule and the topics he’ll be discussing. 

So, should be discuss cyber security and push for further protection, it’d be safe to say that related stocks could run, too.  It’s just something to be well aware of, as you trade the POTUS effect for years to come.

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