PLTR +... Buy / Sell in falling US Market?
US President Donald Trump will deliver his first address to Congress since returning to office on Tue, 04 Mar 2025.
The speech, scheduled for 9:00 PM (US time), comes:
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After US market has closed for Tuesday.
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6 weeks after his inauguration.
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4 years after his supporters stormed the Capitol.
Trump will highlight his executive orders and outline his agenda for the next 1,419 days.
He has already taken steps to reshape the federal government - (1) firing thousands of workers and (2) holding undocumented migrants at Guantanamo Bay.
Trump has also made controversial statements about annexing Canada and criticized the European Union. His actions have been met with legal challenges and criticism from some Republicans.
Democrats will respond to his address with Senator Elissa Slotkin providing the opposition rebuttal.
My viewpoints: (mine only)
If Mr Trump’s speech proved to be “too radical” for the liking, US market may tumble further when it opens for trading on Wed, 05 Mar 2025.
Already US market has started March 2025, on the wrong footing on Mon, 03 March 2025. (see below)
It will not be rocket science to predict how US market will react when Tuesday trading resumes.
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DJIA: -1.48% (-649.67 to 43,191.24).
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S&P 500: -1.76% (-104.78 to -5,849.72).
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Nasdaq: -2.64% (-497.09 to 18,350.19).
Politics aside, for investors, it will be about dissecting Mr Trump’s upcoming speech.
It is hoped that there will be clarity on his aggressive economic policies, that have already created significant market turbulence, in the past weeks & month.
Investors could closely monitor the following themes and sectors for potential opportunities and risks:
Key Look Out:
(1) Tariffs and Manufacturing:
The 25% tariffs on imports from Mexico and Canada, starting Tue, 04 Mar 2025, aim to boost domestic manufacturing.
Companies in US-based manufacturing, particularly steel, aluminum, and automotive sectors, could benefit from reshoring efforts and increased domestic production.
What are the odds of re-shoring taking place within the year or two, considering the costs and the strong labour union that “work against” the company ?
And for companies that are non-US based to begin with, the tariffs will potentially raise costs for US-based industries reliant on imported materials, potentially impacting profit margins for companies in consumer goods or energy sectors.
(2) Energy Sector:
Trump's focus on expanding US energy production through (a) deregulation and (b) prioritizing fossil fuels could benefit oil, natural gas, and rare earth mineral companies.
Conversely, renewable energy firms may face headwinds due to halted offshore wind energy projects.
(3) Technology and AI:
Trump's emphasis on artificial intelligence and recent announcements of substantial investments in technology suggest a favorable environment for US-based tech firms focusing on AI and advanced manufacturing.
(4) Consumer Goods and Inflation Risks:
Tariffs are likely to drive up prices for imported goods, potentially increasing inflation.
Investors should be cautious about consumer-facing industries that may struggle with (a) higher input costs or (b) reduced consumer spending power.
(5) Global Trade Tensions:
Heightened trade conflicts with Canada, Mexico, and potentially China could disrupt global supply chains.
China has reacted to the additional 10% tariffs coming into effect on Tue, 04 Mar 2025 - in addition to the 10% already imposed early last month. (see below)
Does this mark the beginning of global trade war between the world’s two largest economies ?
Export-reliant sectors or firms with significant international exposure may face volatility.
Taking the above into considerations, will below be strategic moves by investors ?
Possible Investment Strategy :
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Focus on Domestic Manufacturing: Companies benefiting from reshoring trends or tariff protections (e.g., steelmakers) are worth considering. Eg. $Nucor(NUE)$
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Energy Stocks: Look into traditional energy producers poised to gain from deregulation. Much prefer $ConocoPhillips(COP)$ over ExxonMobil (XOM) or Chevron (CVX) given their legal entanglement with Hess, that is unlikely to see light at the end of the tunnel until after May 2025.
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AI and Tech: Target firms advancing in AI or benefiting from new domestic investments - $Palantir Technologies Inc.(PLTR)$ and $BigBear.ai Holdings(BBAI)$ .
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Hedge Against Inflation: Consider inflation-protected securities or commodities as a safeguard against rising prices $Wal-Mart(WMT)$ .
While opportunities exist in certain sectors, investors should remain cautious about broader US economic risks such as:
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Potential recessions.
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Prolonged trade disputes.
Diversification remains key in navigating this uncertain environment. Agree ?
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Do you think the speech will cause US market to free fall or worse cause civil unrest?
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Do you think there are other more worthy sectors’ stock to invest OR is cash - King ?
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Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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