Third Point’s Daniel Loeb believes the odds are rising that former President Donald Trump will win the U.S. presidency this November over Vice President Kamala Harris, the influential Powerful hedge fund managers are adding to their positions, which would benefit under a Republican administration and Congress. “We believe the increased likelihood of a Republican winning the White House will have a positive impact on certain industries and the market as a whole,” Loeb wrote in a letter to investors obtained by CNBC. “We believe that The proposed tariffs of the “America First” policy will increase domestic manufacturing, infrastructure spending, and prices of certain materials and goods…Reduced regulations in general, and the Biden-Harris administration’s aggressive antitrust stance in particular, will unleash productivity and a wave of corporate activity. Polls suggest the race will remain a tight race this November, with a recent NBC News poll showing the Republican nominee is in a deadlock with Vice President Kamala Harris. Loeb said in his quarterly letter that he is increasing “stock and option purchases” to bet on a Trump victory. Loeb is not the only one on Wall Street making these bets, with JPMorgan Chase recently highlighting bank stocks and the dollar. The gains came amid signs that more investors see a Republican win as some of the fund’s third-quarter winners highlighted by Loeb could benefit from deregulation and an increase in domestic manufacturing under Trump, particularly utilities. Utility company PG&E, nuclear power company Vistra and conglomerate Danaher, which has been heavily criticized by the Biden administration for violating antitrust laws and which Loeb also owns, could also benefit. Additionally, Loeb believes that the Republicans will hold a majority in the Senate regardless of the outcome of the presidential race, so even if Harris wins, the downside for these stocks will be limited. His comments come as Third Point Offshore’s gains this year. The fund has lagged the S&P 500, which has returned 14% year-to-date after fees, while the broader market has gained nearly 23%, the letter said. The fund also lagged the market, Loeb hinted. His fund has been hurt in the short term because of its heavy holdings in large-cap technology stocks, which have been stars of the narrow bull market, but he believes the improvement in market breadth that began in the third quarter is continuing, especially under a Republican administration. Loeb said overall the U.S. economy is in good shape because he sees “no evidence” that a recession is coming. The manager also revealed that he has added a position at Danish freight company DSV. —Additional reporting by CNBC’s Scott Wapner.
Hedge fund manager Daniel Loeb thinks Trump’s chances are growing | Real Time Headlines
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