Trump Trade: Supreme Court will hear TikTok ban challenge

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:

SUPREME COURT TO HEAR TIKTOK BAN CHALLENGE: The Supreme Court announced it will hold oral arguments on January 10 on TikTok’s bid to invalidate the law requiring them to divest from their Chinese parent company or face being banned in the U.S. TikTok filed an emergency application asking the high court to delay a January 19 divest-or-ban deadline and the court opted to move the emergency appeal to its normal docket to immediately take up the case in full. Publicly traded companies in the social media space that compete with TikTok include Meta Platforms (META), Alphabet (GOOGL), Pinterest (PINS), Reddit (RDDT) and Snap (SNAP). President-elect Donald Trump recently met with TikTok CEO Shou Zi Chew at Mar-a-Lago. Trump expressed having “a warm spot” for TikTok, saying “we’ll take a look” at the app and a possible ban.

TRUMP OPPOSES FUNDING BILL: President-elect Trump opposed a Republican-backed government funding bill, raising the odds of a government shutdown, CNBC’s Kevin Breuninger reports. A source familiar with Trump’s thinking confirmed that Trump told a Fox News host he is “totally against” the continuing resolution. Trump’s opposition comes after Elon Musk tried to sink the 1,547-page bill throughout the day, which he says is laden with wasteful spending. If no legislation is passed by the House and Senate and signed by President Joe Biden after Friday night, the federal government would enact a partial shutdown that could include employee furloughs.

MACHINERY AND INFRASTRUCTURE SERVICES: Truist issued a research note previewing 2025 for Machinery and Infrastructure Services Industrials names. Under the Trump administration, deregulation, potential easing of permitting on large projects, and a more balanced mix between green and traditional energy should ultimately support growth in the U.S. economy, the firm says, warning, however, that tariffs and/or escalation in trade tensions could ultimately cause demand destruction, aggravating the supply chain, and reigniting inflationary pressures. Companies in the space include Fluor (FLR), MasTec (MTZ), Caterpillar (CAT), Deere (DE), Paccar (PCAR), United Rentals (URI), Cummins (CMI), CNH Industrial (CNHI), Agco (AGCO), Oshkosh (OSK), Terex (TEX), Quanta Services (PWR) Jacobs (J), Parker-Hannifin (PH), Illinois Tool Works (ITW), Fortive (FTV), Cognex (CGNX), and Zebra Technologies (ZBRA).

STOCK COVERAGE, RATING CHANGES:

• Oppenheimer upgraded Block (SQ) to Outperform from Perform with a $115 price target. The firm thinks potential negative regulatory impacts will be manageable on Fintech companies in 2025, and that the incoming U.S. presidential administration may soften threats.
• RBC Capital downgraded V2X (VVX) to Sector Perform from Outperform with a price target of $58, down from $70. With the incoming Trump presidency, the government services sector, and V2X specifically, “could be caught in the cross-hairs” of the Department of Government Efficiency, the analyst tells investors in a research note.
• RBC Capital downgraded General Dynamics (GD) to Sector Perform from Outperform with a price target of $290, down from $330. General Dynamics’ defense exposure will continue to be a headwind until we get better visibility of defense under Trump 2.0, the analyst tells investors in a research note. RBC sees the new Trump administration poses greater risk for the General Dynamics defense portfolio.

OTHER NEWS:

The Federal Reserve on Wednesday cut its key interest rate by a quarter percentage point and indicated a more cautious approach to additional cuts in the future. The Fed said it anticipates only two more cuts in 2025, two less than what it had expected in September. “Today was a closer call but we decided it was the right call,” Fed Chair Jerome Powell said at his post-meeting news conference.

The Congressional Budget Office estimates high tariffs pledged by President-elect Donald Trump may improve the nation’s fiscal outlook, but at the cost of higher inflation and slower economic growth than would otherwise be the case, Courtenay Brown of Axios reported. The CBO’s estimates, released in a letter to lawmakers on Wednesday, came at the request of Senate Majority Leader Chuck Schumer, budget committee chair Sen. Sheldon Whitehouse, and Oregon Sen. Ron Wyden, who leads the finance committee. The CBO estimates tariffs would spur price hikes on consumer goods, at least initially, though after 2026, however, the CBO says that the tariffs would not have any “additional significant effects on prices.”