Trump And Stocks: The Week In Review

In a week that culminated with Donald Trump's inauguration as he became the 45th U.S. President, several companies were in the spotlight after announcing the creation of thousands of jobs and new investment in the country. Additionally, Morgan Stanley upgraded Tesla (TSLA) on a sooner than expected launch of its Model 3 vehicle and a "surprisingly" supportive political environment, while Citron Research published a report claiming TransDigm (TDG) may be a at risk as Trump takes office.

TESLA: On Wednesday, Morgan Stanley analyst Adam Jonas upgraded Tesla to Overweight from Equal Weight, citing his expectations for a sooner launch of its Model 3 vehicle and less competition pressure as Apple (AAPL) reportedly scaled back its Project Titan and Alphabet's (GOOG, GOOGL) Waymo seems to focus on making better drivers rather than better cars. Additionally, the analyst believes Tesla stands at the epicenter of the U.S. high tech manufacturing job creation, which may benefit more than just symbolically under the new Trump administration. Elon Musk has an "important line of communication" to Donald Trump through his role as a strategic advisor to the President, he noted, saying this level of coordination could evolve into "greater strategic value" than with the prior administration.

GENERAL MOTORS: With a campaign focused on saving American jobs and bringing back companies to the country, Donald Trump has since targeted automakers on Twitter, urging them to keep or bring production to the U.S. or risk facing steep border taxes. This week, General Motors (GM) was the carmaker making headlines as it announced that the company will invest an additional $1B in the U.S. manufacturing operations.

BAYER: After meeting with President Donald Trump, Bayer (BAYRY) also announced earlier this week that the pharmaceutical has committed to $8B in research and development in the U.S.

WAL-MART: In other U.S. job news, the giant retailer Wal-Mart (WMT) announced that it would create about 10,000 jobs in the country this year by opening or remodeling stores and investing in its e-commerce business.

TRANSDIGM: On Friday shares of TransDigm (TDG) were under pressure after Andrew Left's Citron Research published a report on its website claiming the aircraft components supplier "stands out when it comes to egregious price increases foisted on government." The short-selling firm argued that TransDigm's business is to aerospace as Valeant (VRX) was to the pharmaceutical industry, with the former acquiring airplane parts companies, firing employees, and "egregiously" raising prices. While pointing out that the government "has already been down this road, scrutinizing the price gouging" perpetrated by TransDigm, Citron Research highlighted in its report the company's "inherent business vulnerability" under an administration seeking to save money by creating better deals for the U.S. government. "Trump + Stocks" is weekly recap of stories that highlight stocks that are being impacted, or are predicted to be impacted, by the comments, actions and policies of President Trump and his administration.
 

Disclosure: None.

OTHERS TO WATCH: Many others in the retail sector are lower this morning, including Macy's, Kohl's, American Eagle, ...

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Chee Hin Teh 7 years ago Member's comment

Thanks for sharing