By Jeff Clark, editor, Market Minute

Jeff Clark here – I just recorded a short video to answer the question on all of our minds: “Now that we know Donald Trump has won the presidency, what is going to happen in the markets?”

Check out my thoughts by watching the video below or scrolling down to read the transcript.

Transcript

Hi folks, Jeff Clark here.

We have a new president. An old president, also a new President, President Trump is the victor.

Not that the Presidency matters too much as to the broad direction of stock prices, but I do think it has some effect on individual names and individual sectors.

And with President Trump, you know, his candidacy was based on a smaller. Government he's talking about appointing a secretary of efficiency. So I think we can look for opportunities in those names that might benefit by smaller government.

Before I get to those individual names, let me talk a little bit about the oil sector.

Because I do think President Trump is pro-energy. He's pro-oil. I mean his slogan is, “drill, baby drill.”

So I think you can look at some of the drillers out there. Look at some of the energy services stocks that encompass the OIH exchange-traded fund. So that would be Haliburton. That could be Apache, it could be Devon Energy. I think there's some really good short-term opportunities in that.

Now in terms of a smaller government or a privatization of government functions. I think you have to look at private prisons. Private correctional facilities. So you've got Geo that's GEO you've got Core Civic, which is CXW, both of those stocks have been under pressure recently.

I think you probably see an uptick on that. Workforce and you know if we start talking about laying off government employees that probably increases the benefit towards, I don't know, temporary workforce provider.

So on that you might look at Manpowergroup, symbol is MAN… you might look at Fiver FVRR, or Upwork UPWK. All of those are contract-based employers.

So you have a lot of opportunities. I think, when you start talking about the privatization of government functions.

The other thing, and this is going to be a little bit off beat.

One thing I wanted to point out, President Trump has talked about appointing Elon Musk, obviously, as the Secretary of efficiency. Now it is common when somebody who's prominent in business becomes a member of government or a secretarial function in an administration, they have to divest themselves of their stocks, obviously Elon Musk owns a just a ton of Tesla.

So if we go back in time, when we look at the last time President Trump was in office, I think one of his controversial appointments was Secretary of State Rex Tillerson.

Rex Tillerson was CEO of Exxon, and so Rex Tillerson was forced to sell all of his Exxon stock. I say “forced” sort of sarcastically because the great benefit of being able to do that is he was able to sell it all without having to pay capital gains taxes on it which is a nice benefit. There's a special exclusion when a when a government employee is forced to sell their stock, they wind up getting an exemption from paying capital gains. So that was a $71 million tax benefit for Mr. Tillerson, and he stayed in office for a little over a year.

So that's a that's a pretty good paycheck for a year. So now I'm thinking with, with Mr. Musk winding up in that similar position. It should be interesting to see what happens with Tesla stock. I think Tesla probably comes under fire. As Mr. Musk is forced to sell if not all of this position, but a good large chunk of his position he owns. You know, $260 million worth of Tesla. Sorry 260 billion worth of Tesla.

So there's a lot of stock at stake with that. And it'll just be interesting, I think, from a civics point of view to see what sort of outrage we get when we talk about him not having to pay capital gains taxes on that. So anyway, I would avoid Tesla stock here.

I would also avoid – and this might seem somewhat odd that I would avoid – the Trump media DJT. I think that stock has run up quite a bit in anticipation of Mr. Trump taking office.

And now that he's in office think that stock probably comes back down. But if you're looking for long plays, I would definitely go into the oil patch and go into oil services.

I would go into private prisons and I would go into the workforce. Temporary workforce employees.

And on the short side, if you're so inclined, I think Tesla's probably a good short here. And I think DJT is probably a good short here as well.

So we'll leave it at that.

Thanks,

Jeff Clark
Editor, Market Minute

P.S. My colleague Louis Navellier is saying that a Trump presidency means a second boom is coming for AI stocks… starting as soon as today. And he has six specific AI stocks in his crosshairs.

Go right here to find out why Louis believes Donald Trump’s election will launch a second boom in AI stocks.