Alpine Macro said certain sectors of the market could emerge as standout winners once President-elect Donald Trump returns to the White House on Monday. Those stocks include small caps, industrials, fossil energy, aerospace and defense stocks, Dan Alamariu, the firm’s chief geopolitical strategist, wrote in a note Thursday. Specifically, he recommends investors go long oil stocks and small industrial stocks and short crude oil prices, alternative energy and specialty retailers. Alpine Macro’s choice comes as stocks tied to the so-called Trump trade have seen a resurgence this week, including the Russell 2000 index and defense and energy stocks. More broadly, stocks had their best week since early November and turned green after a weak start to January. .RUT 3M mountain Russell 2000, 3 Month Stocks tied to Trump’s return to the White House rose in November as the president-elect has long supported policies to deregulate and support domestic manufacturing, which investors viewed as Policies favor small business caps and banking. His comments about the need for allies to increase defense spending to better match U.S. contributions to NATO also helped boost defense inventories. But trade appeared to weaken at the start of the year but has since rebounded strongly. The Russell 2000 rose 4% for the week, as did the S&P Aerospace & Defense Select Sector Index ETF (XAR). Alamariu said: “Alpine Macro believes that U.S. stocks should continue to perform well in 2025 as the Trump administration will support economic growth and prioritize market-friendly, fairly dovish policies.” XAR 3M mountain S&P Aerospace With Defense Select Industrial Index ETF (XAR), 3 Month Still, he warned that the first 100 days of a new administration could be volatile. He also said the market remains vulnerable to potential corrections due to geopolitical and domestic risks and headwinds from Trump’s tariff plans. While Trump still advocates U.S. energy dominance and independence, Aramariu expects that stance to help oil stocks more than oil prices. Oil companies, particularly U.S. shale producers, could benefit from gaining a larger share of the global oil market. “Trump’s first day as chief executive will emphasize ‘drills, baby drills,'” he wrote. “Policies will include withdrawing from the Paris Climate Agreement, opening up federal lands to fossil fuel production, lifting Biden’s restrictions on liquefied natural gas exports, repealing EPA power plant emissions rules, and reducing SEC climate disclosure requirements. Aramariu said aerospace and defense stocks are well-positioned as Trump pushes allies to increase military spending and buy American-made equipment, especially those supplying underperforming airpower equipment or defense brands. To be sure, Trump’s call for tariffs on global imports remains a potential headwind for the market until there is more clarity, Aramaliu said. “If there’s any policy that has the greatest potential to disrupt markets and the economy, it’s Trump’s tariff policy,” Aramariu said. “The economic and policymaking consensus on tariffs is slowly shifting in favor, but the Trump administration may not yet have decided how. Advance.”
Industries that may win early | Real Time Headlines
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