Daniel Loeb, the founder of Third Point, believes that there is a growing likelihood of former President Donald Trump winning the U.S. presidency in November over Vice President Kamala Harris. Loeb is increasing positions in sectors that would benefit under a Republican administration and Congress. He believes that a “America First” policy, including tariffs to increase domestic manufacturing, infrastructure spending, and reduction in regulation, would have a positive impact on certain sectors and the market overall. Loeb is not alone in making these bets, with other investors on Wall Street also betting on a Republican win.
Polls show a tight race between the Republican nominee and Vice President Kamala Harris, but Loeb is increasing both “stock and option purchases” to bet on a Trump-win scenario. He highlights companies such as PG & E, Vistra, Danaher, and Alphabet as potential winners under a Republican administration. Loeb also believes that Republicans will establish a majority in the Senate, limiting the downside for these stocks even if Harris wins. Third Point Offshore, Loeb’s fund, has underperformed the S & P 500 this year, but he expects the market breadth to improve under a Republican administration.
Loeb sees the U.S. economy as being in good shape with “no evidence” of a recession looming. He added a position in the Danish freight company DSV, diversifying his fund’s holdings. The manager believes that a Republican victory in the White House could lead to increased productivity and corporate activity due to reduced regulation. He also expects a Republican win to benefit companies involved in domestic manufacturing and infrastructure. JPMorgan also highlighted gains in bank stocks and the U.S. dollar as signs that more investors are betting on a Republican victory.
Overall, Loeb is optimistic about the future of the U.S. economy under a potential Republican administration. He believes that a Republican victory would lead to positive impacts on certain sectors and the market as a whole. While Third Point Offshore has seen some underperformance this year, Loeb expects the fund to benefit from increased market breadth under a Republican administration. The fund’s year-to-date returns have not matched the broad market’s gains, but Loeb remains confident in his investment strategy. Investors on Wall Street are also making bets on a Republican win, with a focus on companies that could benefit from deregulation and increased domestic manufacturing.
