We’re shifting gears this morning — turning our attention from the election’s political consequences to its financial aftereffects.

To do so, we turn to Paradigm’s macroeconomics authority Jim Rickards who shares his insights on potential investment strategies for the upcoming Trump administration.

First, his advice comes with a cautionary note about the broad market rally following Election Day, emphasizing that “not all stocks will perform well under the new administration.”

For instance, a significant development in the new administration this week is the appointment of Robert F. Kennedy Jr. as Secretary of Health and Human Services — an appointment we forecasted here at Election Insider - The Rundown on August 29.

Kennedy’s nomination could signal a potential shift in health and agriculture policies, leading Jim to advise against investing in Big Pharma and Big Agriculture sectors.

That said, Jim sees Trump's economic agenda as a modern revival of the “American System of Economics,” a concept which dates back to 19th Century statesman Henry Clay.

And before Clay? First Treasury Secretary Alexander Hamilton, reminding us that “History Has Its Eyes On You” — a song from the hit musical Hamilton.

Like the song implies, it’s worth remembering the weight of history and our American legacy…

Your Rundown for Friday, November 15, 2024...

A Reprise of the American System

Not only the wealth; but the independence and security of a Country, appear to be materially connected with the prosperity of manufactures.

Every nation, with a view to those great objects, ought to endeavour to possess within itself all the essentials of national supply. These comprise the means of Subsistence, habitation, clothing, and defence.

So Hamilton wrote in his “Report on Manufactures” which he presented before Congress in 1791.

Jim translates today: “The American System relied on policies such as high tariffs to support manufacturing and high-paying jobs, infrastructure investment, a strong military for protection rather than foreign intervention, and a central bank with limited powers.”

And he summarizes the 21st-Century version of this system as “sound money, smart investment and a strong military in the service of high-paying American jobs.”

A guiding principle of this approach is that “foreign companies will be free to sell goods to Americans but only if they are manufactured in the U.S.”

Because of this, Jim identifies seven sectors that could thrive under Trump's policies:

1. Oil and natural gas: “This sector will benefit from Trump's 'drill, baby, drill' policies,” including increased leasing on federal lands and expanded refinery capacity.
2. Mining: “Industrial metals will be in increased demand related to the expansion of U.S. manufacturing. Precious metals will be in demand as a hedge against geopolitical uncertainty.”
3. Defense and national security: With a focus especially on contractors with strong R&D programs.
4. Auto manufacturing: “Foreign manufacturers will face huge tariffs,” says Jim, potentially boosting domestic production.
5. Cryptocurrency: We will most likely see easing of regulatory constraints on mining, distribution and use.
6. Banking and finance: “As the economy grows, banks profit as intermediaries without the need for high leverage and high risk.”
7. Transportation: Trucking and airlines could benefit from lower fuel prices.

By carefully selecting investments aligned with these emerging trends, investors can position themselves to outperform the broader market in the coming years.

As always, staying informed and adaptable will be key as these developments unfold. (Stay tuned in the coming weeks as we highlight some of the most unique, compelling and outside-the-box “Trump trades.”)

Jim concludes: “It's not too soon to start building a portfolio that will outperform the stock market in the early years of the new Trump administration.”

Market Rundown for Friday, Nov. 15, 2024

S&P 500 futures are down 0.50%, about 50 points below 6,000.

Oil is down 0.15% to $68.59 for a barrel of WTI.

Gold is up 0.20% to $2,578.30 per ounce.

And Bitcoin is up almost 2% to $89,650.