Trump Trade: Federal funding plan endorsed by Trump fails

Catch up on the top industries and stocks that were impacted, or were predicted to be impacted, by the comments, actions and policies of President-elect Trump with this daily recap compiled by The Fly:

NO PBM REFORM: House Republicans eyed a package to extend government funding for three months and suspend the debt limit until January 2027, Jake Sherman of Punchbowl News reported. The bill has health extenders with no pharmacy benefit manager reform, according to Sherman. The three dominant PBMs are Cigna’s (CI) Express Scripts, CVS Caremark (CVS), and UnitedHealth’s (UNH) Optum Rx.

However, the House Republican deal for a three-month federal funding plan endorsed by President-elect Donald Trump failed Thursday night, as a partial shutdown is set to begin late Friday night. The plan would have suspended the U.S. debt ceiling for two years, and contains a $110B extension of disaster and farm aid, but a total of 38 Republicans voted against the bill created by their own party’s leaders, CNBC reported.

BUY MORE OIL: U.S. president-elect Donald Trump warned the EU it must begin buying “large scale” amounts of U.S. oil and gas or face tariffs, Alice Hancock, Henry Foy, and Shotaro Tani of The Financial Times report. EU officials have begun working on potential trade reprisals should Trump impose tariffs and European Commission president Ursula von der Leyen said the EU would consider buying more gas from the U.S. “I told the European Union that they must make up their tremendous deficit with the United States by the large scale purchase of our oil and gas. Otherwise, it is TARIFFS all the way!!!” Trump wrote on his Truth Social platform on Friday. Publicly traded companies in the space include BP (BP), Chevron (CVX), ConocoPhillips (COP), Exxon Mobil (XOM), Shell (SHEL) and TotalEnergies (TTE).

STOCK COVERAGE, RATING CHANGES:

• Citi says U.S. defense stocks have declined as much as 30% since the election, driven by concerns over the potential policies of the new administration and actions the Department of Government Efficiency might recommend. These concerns are likely overdone and the stocks remain attractively priced, the analyst tells investors in a research note. Citi sees the biggest risk to the outlook for U.S. defense spending as the changing role of the country in the post-World War II order it helped to create. It is possible President-elect Trump “will choose to pack up the military’s bags and retreat to bases on the home front, leaving allies to defend for themselves and allow the U.S. to materially cut defense spending,” contends Citi. However, the firm does not think that’s the likely outcome given the potential negative impact on global trade, which remains important to the U.S. economy. CIti’s Buy-rated defense stocks are General Dynamics (GD), L3Harris Technologies (LHX), Leidos (LDOS), Lockheed Martin (LMT), SAIC (SAIC) and Textron (TXT).
• JPMorgan lowered the firm’s price target on EVgo (EVGO) to $7 from $8 and keeps an Overweight rating on the shares. JPMorgan does not think there is significant risk to EVgo’s Department of Energy loan being clawed back under President Trump per its discussions with the company and channel checks across the industry

OTHER NEWS:

In more than 150 separate posts on X, the platform formerly known as Twitter, Tesla (TSLA) CEO Elon Musk led the charge to kill the bipartisan spending deal, in part by sharing misinformation, including false claims that it contained new aid for Ukraine or $3B in funds for a new stadium in Washington, which may lead to a government shutdown over Christmas, The New York Times reports. Musk vowed political retribution against anyone voting for the bill backed by House Speaker Mike Johnson, who called Musk on Wednesday to ask that he stop posting about the bill. President-elect Trump has 96.2 million followers on X, while Musk has 207.9 million, the publication notes.

Elon Musk has tapped Steve Davis, who oversaw Twitter’s cost-cutting, former U.S. chief technology officer Michael Kratsios, and others to interview potential DOGE candidates, Bloomberg reports, citing people familiar with the matter. Musk’s DOGE initiative seeks to cut government spending and size.