Trump Weekly: BofA says Trump policies ‘bullish’ for bank stocks

Here are the top industries and stocks that were impacted by the comments, actions and policies of President-elect Trump this week compiled by The Fly:

WORLD CHANGED AFTER ELECTION: Roth MKM upgraded Tesla (TSLA) to Buy from Neutral with a price target of $380, up from $85, arguing that Musk’s “authentic support for Trump likely doubled Tesla’s pool of enthusiasts and lifted credibility for a demand inflection.” The firm, which says “the world has changed,” says Tesla’s main AI mission is a smarter copilot that “aims to solve orders of magnitude more chaos than other products” and contends that CyberTaxi now faces an accommodative regulatory environment, adding that one can now “daydream about a beautiful red wave of EVs sweeping across the US, with a shiny gold ‘T’ on every car.”

INVESTOR OPTIMISM: BofA says that its investor conversations suggest considerable optimism around U.S. economic outlook on the back of the Trump agenda. Importantly, banks viewed as significant beneficiaries of Trump’s business friendly policy priorities – deregulatory regime, increased M&A, lower taxes, pick-up in domestic capex. The firm believes that the potential for positive EPS revisions combined with improved valuation multiples support the case for bank stocks to outperform the S&P.

BofA believes Trump policy priorities combined with U.S. soft landing is bullish for bank stocks. While valuations are pricing in good news, regime shifts vs. post-GFC period, investor desire to add exposure and valuations that still screen attractively relative to potential for positive EPS revisions and compared to the S&P are all supportive of a continued move higher in bank stocks. The firm sees best value in MAG 5 GSIBs – Wells Fargo (WFC), JPMorgan (JPM), Goldman Sachs (GS), Morgan Stanley (MS); SMID-CAP regionals – First Horizon (FHN), Synovous Financial (SNV), Webster Financial (WBS), Western Alliance (WAL), and East West Bancorp (EWBC).

TRUMP ‘AGAINST’ U.S. STEEL DEAL: President-elect Donald Trump said on his Truth Social platform that he is “totally against” U.S. Steel’s (X) deal to be acquired by Nippon Steel (NPSCY). In his post, Trump stated: “I am totally against the once great and powerful U.S. Steel being bought by a foreign company, in this case Nippon Steel of Japan. Through a series of Tax Incentives and Tariffs, we will make U.S. Steel Strong and Great Again, and it will happen FAST! As President, I will block this deal from happening. Buyer Beware!!!”

TARIFF IMPACT ON RETAILERS, CONSTRUCTION: Discussing the potential impact of Trump 2.0 tariffs would mean for U.S. retailers, Bernstein said the firm believes the Dollar Tree (DLTR) banner and Target (TGT) are among the most exposed to potential tariff risks, followed by Home Depot (HD) and Lowe’s (LOW), due to their higher exposure to imports. Much of this concerns consumer goods imports from China, the firm notes. Import data shows that the most relevant impact to retailers from imposing additional tariffs on Canada, Mexico, and China will be on consumer goods categories – computers, cellphones, toys/games, electric apparatus, and apparel & textiles. There will also be indirect impacts from increases in the price of commodities such as oil & gas and aluminum, but these could be mitigated by increased domestic supply, Bernstein added.

Meanwhile, the construction industry is vulnerable to President-elect Donald Trump’s vow to deport millions of undocumented immigrants as well as his threats to introduce new tariffs on Mexico and Canada, Elizabeth Findell and Gina Heeb of The Wall Street Journal reported. In Texas, California, New Jersey and the District of Columbia, immigrants make up more than half of construction trade workers, according to Riordan Frost, a senior research analyst at the Harvard Joint Center for Housing Studies, the Journal points out. The paper adds that undocumented workers make up an estimated 13% of the construction industry, or more than twice that of the overall workforce. Publicly traded companies in the homebuilding space include Beazer Homes (BZH), D.R. Horton (DHI), Hovnanian (HOV), KB Home (KBH), Lennar (LEN), M.D.C. Holdings (MDC), PulteGroup (PHM) and Toll Brothers (TOL).

FISERV CEO TO JOIN TRUMP ADMINISTRATION: Fiserv (FI) announced that Frank Bisignano, Fiserv chairman, president and CEO, has been nominated by president-elect Donald J. Trump as the Commissioner, Social Security Administration. The appointment of Bisignano is subject to confirmation by the U.S. Senate, and Bisignano will continue in his current positions with the company until confirmation occurs.

BofA said it expected shares to trade lower on this “unexpected news.” While Bisignano has been a very prominent figure in Fiserv’s success over the past few years, the firm believes the company has a strong bench of talent and notes the “upbeat tone” from CFO Bob Hau’s fireside chat at an investor conference. BofA has a Buy rating and $214 price target on Fiserv shares.

AI & CRYPTO CZAR: President-elect Donald Trump announced that David O. Sacks will be the “White House A.I. & Crypto Czar.” He said: “In this important role, David will guide policy for the Administration in Artificial Intelligence and Cryptocurrency, two areas critical to the future of American competitiveness. David will focus on making America the clear global leader in both areas. He will safeguard Free Speech online, and steer us away from Big Tech bias and censorship. He will work on a legal framework so the Crypto industry has the clarity it has been asking for, and can thrive in the U.S. David will also lead the Presidential Council of Advisors for Science and Technology… David has the knowledge, business experience, intelligence, and pragmatism to MAKE AMERICA GREAT in these two critical technologies. Congratulations, David!” Publicly traded companies in the space include Bit Digital (BTBT), Bitfarms (BITF), Coinbase (COIN), Core Scientific (CORZ), Greenidge Generation (GREE), Mara Holdings (MARA), MicroStrategy (MSTR), Riot Platforms (RIOT), Stronghold Digital Mining (SDIG) and TeraWulf (WULF).

TRUTH SOCIAL: Trump Media’s (DJT) Truth Social had 355,000 daily active users in November, up 3% month over month after Donald Trump won his second term as U.S. president, according to data from research firm Apptopia, Bloomberg’s Bailey Lipschultz reports. Traffic at the social media site remains small compared to its competitors, and while the monthly gain did outpace peers, the total user numbers still trail X’s by 400-times and Instagram’s (META) Threads by a similar margin, the data show. Apptopia data also show that the average person who opens the Truth Social app on a smartphone spent 4.4 minutes there per day in November, while users scroll X, the platform formerly known as Twitter, for nearly 28 minutes per day.

BITFARMS: Alliance Global Partners initiated coverage of Bitfarms (BITF) with a Buy rating and $6 price target. President-elect Trump ran on a pro-Crypto platform and has surrounded himself with like-minded politicians, says the firm, which argues that Bitfarms will benefit from a pro-crypto U.S. administration.

MSC INDUSTRIAL: MSM Stephens downgraded MSC Industrial (MSM) to Equal Weight from Overweight with an unchanged price target of $85. Since earnings, shares have moved about 9% higher, aided by post-election enthusiasm as the company should benefit from any tariff-driven inflation and/or stimulus of the U.S. manufacturing base, but the nearer-term trends appear challenged, the firm says.

ALPHABET CEO ‘OPTIMISTIC’: At the DealBook Summit, Alphabet (GOOGL) CEO Pichai expressed optimism about President-elect Donald Trump, who has publicly expressed skepticism about the possibility of a Google corporate split, though Pichai said he had not discussed the litigation with the president-elect since the election. The two men had spoken about energy and the need to innovate to build things, and Pichai expressed optimism about Trump’s plans, Pichai said. “There are areas where he’s thinking about, and committed to, making a difference, so hopefully we can make progress there,” Pichai said, adding that Trump is focused on the need for American competitiveness on AI.