Saturday, November 12, 2016

Bloomberg on the Economic Effects of Trump's Victory

From Tracy Alloway and Lily Katz's 11-9-16 Bloomberg article entitled "Private Prison Stocks Are Surging After Trump's Win":

"Two companies that operate detention facilities in the U.S. are breaking out.

"Donald Trump's victory in the presidential elections helped shares of Corrections Corp. rise as much as 60 percent before paring their surge to 34 percent by 10:14 a.m. in New York, while GEO Group Inc. was trading 18 percent higher by the same time.

"Those moves mean the stocks have recouped some of the losses they've registered since August, when the Department of Justice said it would start phasing out privately run jails. Analysts say President Trump would be likely to reverse that policy, and see an added windfall to the companies stemming from the difficulty of implementing his deportation agenda.

"'Private prisons would likely be a clear winner under Trump, as his administration will likely rescind the DOJ's contract phase-out and ICE capacity to house detainees will come under further stress,' analysts at Height Securities LLC wrote in a note published this morning, referring to the Immigration and Customs Enforcement body by its acronym. Mass deportation of illegal immigrants would be likely to run into legal obstacles, 'further necessitating a sizable contract detention population,' the analysts said."

From Rita Nazareth, Anna-Louise Jackson and Eliza Ronalds-Hannon's 11-9-16 Bloomberg article entitled "U.S. Stocks Rise, Treasuries Fall as Trump Win Spurs Growth Bets":

"American stocks rebounded as traders shrugged off the jitters that followed Trump’s victory. The S&P 500 rose 1.1 percent to 2,163.26 at 4 p.m., after futures contracts tumbled as much as 5 percent overnight. The benchmark rallied to a one-month high.

"'We expect the equity market response to the election result will be limited,' said David Kostin, chief U.S. equity strategist at Goldman Sachs Group Inc. 'The U.S. economy has been expanding for seven years and continues to grow at a subdued pace. We expect the U.S. stock market will climb slowly during the next few years in line with earnings growth.'

  • BANKS: rallied as Trump has vowed to reduce regulation
  • DRUGMAKERS: surged as Democratic threats of price controls are no longer a concern with Republicans retaining both houses of Congress
  • DEFENSE & INFRASTRUCTURE: Lockheed Martin Corp. and Caterpillar Inc. climbed on Trump’s pledge to boost spending in both industries
  • PRISON OPERATORS: Corrections Corp. soared on speculation the new administration will rescind a government contract phase-out
  • INTERNATIONAL TRADE: Coca-Cola Co. and Procter & Gamble Co. retreated
  • GUNMAKERS: Sturm Ruger & Co. sank on speculation that fewer people would rush out to stock up on pistols and rifles with the threat of stronger gun control laws fading
  • HOSPITAL OPERATORS: Community Health Systems Inc. sank on speculation Trump will move to repeal Obamacare
  • CLEAN ENERGY: SunPower Corp. fell on concern Trump will weaken demand for renewable energy"

No comments:

Post a Comment