The Prof G Pod with Scott Galloway - Prof G Markets: Winners and Losers Under Trump’s Second Term

Episode Date: November 11, 2024

Follow Prof G Markets: Apple Podcasts Spotify Scott and Ed open the show by discussing the end of the Boeing machinist workers strike, Perplexity’s offer to help the New York Times, and Palantir’s earnings. Then Scott and Ed break down the sectors that they expect will see the biggest gains and losses under the Trump administration. They also discuss which regulators will survive the Trump administration and explain what the market is telling us about the future of housing prices.  Check out Prof G Markets in Spanish and Portuguese on Youtube.  Order "The Algebra of Wealth," out now Subscribe to No Mercy / No Malice Follow the podcast across socials @profgpod: Instagram Threads X Reddit Follow Scott on Instagram Follow Ed on Instagram and X Learn more about your ad choices. Visit podcastchoices.com/adchoices

Support for this show comes from Constant Contact. If you struggle just to get your customers to notice you, Constant Contact has what you need to grab their attention. Constant Contact's award-winning marketing platform offers all the automation, integration, and reporting tools that get your marketing running seamlessly, all backed by their expert live customer support. It's time to get going and growing with Constant Contact today. Ready, set, grow.

Go to constantcontact.ca and start your free trial today. Go to constantcontact.ca for your free trial. Constantcontact.ca. Support for this show is brought to you by Nissan Kicks. It's never too late to try new things, and it's never too late to reinvent yourself. The all-new reimagined Nissan Kicks is the city-sized crossover vehicle that's been completely revamped for urban adventure. From the design and styling to the performance, all the way to features like the Bose Personal

Plus Sound System, you can get closer to everything you love about city life in the all-new reimagined Nissan Kicks. Learn more at www.nisonusa.com slash 2025 dash Kicks. Available feature, Bose is a registered trademark of the Bose Corporation. Do you feel like your leads never lead anywhere, and you're making content that no one sees, and it takes forever to build a campaign? Well, that's why we built HubSpot. It's an AI-powered customer platform

that builds campaigns for you, tells you which leads are worth knowing, and makes writing blogs, creating videos, and posting on social a breeze. So now, it's easier than ever to be a marketer. Get started at HubSpot.com slash marketers. Today's number, $446 million. That's the combined payout election bettors will get

from prediction sites, Polymarket and Cal-She. Wow. Welcome to Prov G Markets. Today we're discussing winners and losers in the markets under a second Trump term. But first here with the news is ProfG analyst, Ed Elson. Ed, how are you? I'm doing very well today, Scott. The sun is shining.

It's a new day. I'm feeling pretty good. How are you feeling? So I did, I don't know if I told you, did I tell you about my Peroni and Xanax prescription? Panics. I did hear about that, but I didn't hear, I didn't hear how the bet fully shaked out.

I know you bet on the election. So you're feeling a little more upset than you otherwise would have, right? Well, no, it's better to be lucky than good. So what happened was I went to polymarket thinking I had great insight. It was trading at about 60, 40, meaning you get a payout at two and a half bucks on what I thought was a coin flip.

I was going to go on polymarket. I started registering and it said, oh, you're not in the U S or you're in London. You can't do it. I'm like, no, five. And so I went to this thing called bet three 65. And as you can imagine, I'm really good and have a lot of patients with registering at sites.

So I didn't end up doing it. I thought, well, I will, I still want to do this. So I did a collared options strategy and that is I sold in Donald Trump media, a bunch of calls that strike price of 20, thinking it could crash to 20 if she got elected, but because I was worried it might go to 100 or 200, I bought some calls at 60, way out of the money, sort of what I think is referred

to as a caller strategy. I got $21 in premium for selling the calls, and it cost me six bucks for the insurance on the back end at 60 bucks, So a net proceeds of $15. And I also thought that even if he wins, that stock has become a bit of a meme stock or a prediction vessel for the election. But once the prediction is over and it's obvious he wins,

we're left with a shitty company. And so I thought there was a decent chance. I knew it would go down if she won. And I thought there was a decent chance it still might go down if he won. Anyways, as we sit here today, I think the stock is falling up dramatically. I think it's trading at about 28 bucks right now.

So I've actually made money on this trade. See above, it's better to be lucky than good. But here's the asterisk here. I'm self-conscious. I like to be transparent about money because I think people should talk about money. This is not investing, this is gambling. I wanna be clear, I know I'm self-conscious, I like to be transparent about money because I think people should talk about money. This is not investing, this is gambling. I wanna be clear, I know I'm gambling.

And whenever you write an option, especially if you write calls, I would say be very careful and think about buying calls that are very upper end such that you don't get hurt too badly. And also don't ever gamble more money than you can afford to lose. And my personal metric is I can lose enough money

that it would ruin my morning or my afternoon, but it couldn't even ruin my day. So, because be clear, when you are playing with options, you know, what is it, 80 or 90% expire worthless. So this is a highly risky strategy. This is not investing, this is gambling. But I was so confident that Harris was gonna win that I wanted to play this.

And I got lucky by doing this option strategy and the fact that Donald Trump media is no longer seen as a bellwether that he's going to win, he's won. Now it's just a shitty company that's got 3 million revenues and is hemorrhaging money. But we'll see, there's still time here. They don't expire till next Friday. Okay, so just quick message to our listeners.

Please do not short squeeze my boss. Please don't expire till next Friday. Okay, so just quick message to our listeners. Please do not short squeeze my boss. Please don't do it. We don't, we don't want it to go to 60. And with that, we'll start with the weekly review of Market Vitals. The S&P 500 climbed, the dollar strengthened, Bitcoin hit a new record and the yield on 10-year Treasuries spiked, shifting to the headlines. The Boeing strike is over after workers voted to accept an offer that includes a 43% compounded raise over four years.

However, the deal does not restore the pension plan, which was a sticking point for many union members. Perplexity CEO Aravind Srinivas has offered to provide technical infrastructure support to the New York Times amid the tech guild's strike. That offer comes less than a month after the Times sent a cease and desist to Perplexity demanding the start-up stop using its content to train AI models. And finally, shares of data analytics firm Palantir rose 23% to a record high after its earnings beat analyst

expectations. The strong earnings were primarily driven by robust US government spending on its products, with the company securing a $100 million military contract. Shares are up more than 218% so far this year. Scott, let's start with Boeing. I'll just quickly go over the agreement here. So they're getting an immediate 13% bump followed by three more bumps over the next three years. So ultimately over four years when you factor in compounding, they're going to get a 43.65% increase from their current wage.

They're also going to get a $12,000 ratification bonus. They are not getting that traditional pension plan that many of them wanted. They're going to get the defined contribution plan. If they invest 8% of their salary into their 401k, Boeing will co-invest that same amount into the 401k. So this kind of turned out the way that we expected. The workers got that pay rise that they

were looking for. We predicted that. We said it was a reasonable request. They got it. They didn't get that pension plan. We also predicted that. Scott, your reactions to the end of the Boeing strike. I think you summarized it. This feels right as rain. They clearly, they hadn't had a raise in, I think, five years when up substantially, 43% is real cabbage. It's a little bit misleading because my understanding is it's over four years. So it's more like eight or 9% a year, I think, if it compounds.

Right, 13%, 9%, 9%, 7% specifically. There you go. So it's a real race. That's gonna be hopefully much faster than inflation. So their purchasing power will go up. But yeah, this was an easy call around the pension. Companies can't subject shareholders to a pension plan that might end up becoming like an unexploded device within the company where they have all these obligations after the asset has left the company. So good for Boeing,

good for Boeing employees, good for the planet. Perplexity, this is a pure publicity stunt, and it's smart because we're talking about it. And he's not gonna win a lot of favors with, you know, NYT employees, but what's a little bit misleading or requires no answer to what you're saying, NYT is suing everybody that's using their content. They're not specifically going after, I mean, they're going after all of them, right? They're saying they're trying to build some IP, they're going after all of them, right?

They're saying they're trying to build some IP and they're trying to ring fence their content, which is smart. If they were smarter, they'd be binding together or creating a consortium such that they could speak with a louder voice because even as strong as all the NYT or valuable as all the NYT content is, it's still not strong enough to go toe to toe

with any of these guys. Any thoughts from you on perplexity? I think you're exactly right that this is a publicity stunt and we should just confirm it worked. This was covered by 13 different news publications. Just the simple act of the CEO going to the New York Times and saying, hey, you want to use our AI in the midst of your strike. Those publications include the New York Post, they include TechCrunch, your strike. Those publications include the New York Post, they include TechCrunch, several others.

And here's the most important statistic, which is that in the past seven days, Google search volume for the CEO, Aravind Srinivas, has increased 70%. So as far as publicity stunts go, this was sort of a smashing success. Yep, and then Palantir, so I got to give it to them. I was very skeptical a smashing success. Yep. And then Palantir. So I got to give it to them.

I was very skeptical of this company. I thought it was very opaque and creating this kind of cloak and dagger feel to create differentiation or deep dark technology where there wasn't any. They clearly continue to perform, continue to beat expectations. The CEO understands storytelling. So nothing like a company that's kind of got this deep, cool, innovative AI, spy versus spy feel combined with beating earnings consistently and combined with the CEO who goes on Bill Maher and is really great at messaging. So

this company in my mind is still incredibly overvalued, but good for them. Stock is tripled in the last year, second best performer in the S&P. Right now, our S&P 500, a VISTA and electricity provider that has benefited from the AI power boom is number one. But their government revenue was up 40% year on year to 320 million, making up about two thirds of the company's total revenue. They traded a P of 130, which is more than three times

the valuation on a P basis of Nvidia. And Nvidia is growing four times faster than Palantir and has 50% net profit margin compared to Palantir's 20%. So one of two things is true here. Either Palantir is dramatically overvalued or Nvidia is dramatically undervalued. It has a ton of short interest more than its competitors as a percentage of its float. Palantir is up around 5%, Snowflake's at 4%, and IBM is at about 2.5%.

And then people are very bullish on Palantir because of the incoming administration thinking that defense spending typically goes up under Republican administrations. And in the first 2. half years of the Trump administration, Palantir's revenue from the U S government contracts are past its total under president Obama's entire second term. So this is a government contractor, but it's a good business to be in. Yeah. Well, the defense spending point is interesting because yes, exactly.

They're still heavily reliant on government revenue, makes up 64% of their overall revenue. Most of that is analytics for the military and for the Department of Defense. What the market is telling us is, one, they had a great quarter, but at the same time, they're also bullish on the fact that we have a Republican in charge, that Trump is now in charge, that Trump is now in charge. And theoretically, that means that defense spending will go up. But then there's the other side, which is Trump, his whole campaign has been that it's going to be an isolationist foreign policy.

His whole shtick is that we're going to be pulling back from all of our military exploits. That's at least the argument that I've been hearing from my Republican friends. And so, you know, it feels like we're at a bit of a crossroads. It's not really clear what we think is going to happen in terms of defense. He said he's going to cut spending, but the market is telling us no, that we actually think that Trump's going to increase the amount that we spend on the military, which yes, would benefit Palantir. If he cuts back, it would be harmful to Palantir. So I think that's just an interesting dilemma right now, but I think

it's something to keep an eye on. I think Palantir is going to be a good tracking stock for trying to understand where are we headed in terms of our defense spending. I think the market's got to ride. I can't see Trump. First off, Trump is not afraid of deficits. He loves being able to beat his chest. I just can't see the whole affinity, testosterone driven, macho bullshit

resulting in him ever cutting spending on the military. I think he, I just don't think he, all the incentives are lined up for, to either keep at best military spending flat. I'd be surprised if it didn't go up. It's just the kind of guy he is. He wants to be able to say, you know, go to Putin and go to Tim Jong-un and say, yeah, our military continues to spend more than the next 10, nine biggest spenders combined. We'll be right back after the break with a look at the market's winners and losers under

a second Trump administration. And quick reminder, ProfG Markets has its own feed now. There you'll get two episodes every week. So if you're still listening on the ProfgPod, move over, type in ProfgMarkets wherever you get your podcasts and hit follow. We'll be right back. Support for ProfgMarkets comes from Funrise.

It's no secret that the AI industry is growing through the roof right now. You know it, your friends know it, your dad even knows it, but that doesn't make it any easier to start investing in the technology up tomorrow. Because most of the AI revolution is being built and funded in private markets. That means the vast majority of AI startups are going to be backed and owned by venture capitalists, not public investors. The Fundrise Innovation Fund is trying to change the landscape for regular investors. The Innovation Fund pairs a $100 million plus venture portfolio of some of the biggest names

in AI with one of the lowest investment minimums in the venture industry. AI is already changing the world, but this time you can get in early with the Fundrise Innovation Fund. You can get in early at fundrise.com slash markets. That's F-U-N-D-R-I-S-C dot com slash markets. Carefully consider the investment material before investing including objectives, risk charges, and expenses. This and other information can be found in the Innovation Fund's prospectus at fundrise.com slash innovation. This is a paid advertisement.

Support for property markets comes from Mint Mobile. Don't you hate it when you go to pay for something and then find out the actual price is way higher than what you thought it was? Seems to happen all the time with big cellular providers. Well, with Mint Mobile, you'll never have to worry about gotcha fees ever again. When Mint Mobile says you pay $15 a month when you purchase a 3-month plan, they mean it. All plans come with high-speed data and unlimited talk and text delivered on the nation's largest

5G network. And, you can use your own phone and bring your phone number with you, along with all your existing contacts. To get this new customer offer and your new 3-month premium wireless plan for just $15 a month. Go to MintMobile.com slash markets. That's MintMobile.com slash markets. Cut your wireless bill to $15 a month at MintMobile.com slash markets.

$45 upfront payment required equivalent to $15 per month. New customers on the first three-month plan only speed slower by 40 gigabytes on unlimited plan. Additional taxes, fees, and restrictions apply. See Mint Mobile for details. Support for property markets comes from Vanta. Proving trust is more important than ever, especially when it comes to your security program. Vanta helps centralize program requirements and automates evidence collection for frameworks

including SOC 2, ISO 27001, HIPAA and more so you can save time and money and build customer trust. And with Vanta you get continuous visibility into the state of your controls. Join more than 8,000 global companies including Atlassian, Flow Health and Quora who trust Vanta to manage risk and improve security in real time. Now that's a new way to GRC. Learn more at vanta.com slash markets. That's vanta.com slash markets. We're back with Profit Markets. Donald Trump has laid out a broad economic plan for the U S that includes tax cuts,

tariffs, deportations, a reduction in energy prices, and much more. Over the next four years, this plan will affect the economy in a variety of ways. So Scott, we're just going to look at the market's reaction to Trump's win, and we'll go through some of the winners and some of the losers under this new administration. So we'll start with the winners. Our first winner is the US stock market overall. So the S&P 500 surged, so did the Dow.

And this is all in broad expectation of corporate tax cuts. Trump plans to bring down the corporate tax rate from 21% to 15%. In addition, volatility is down as investors finally know the results of the election. So that has been a help for the stock market too. Going to more specific companies and more specific sectors.

Our second winner is Tesla. So Tesla rose 14% after the election result. Investors believe that Tesla will benefit from this administration, largely due to likely his relationship, Elon Musk's relationship with Donald Trump. But there are some other more concrete economic explanations. So for example, Trump's China tariffs. As we know, Trump is planning to increase tariffs on China, which will keep Chinese competitors out of the US.

As we've discussed before, one of Tesla's greatest threats is BYD, a Chinese vehicle maker. In addition, Trump plans to remove subsidies for electric vehicles. You would think that would hurt Tesla, and maybe it will, but more likely is that it will hurt small EV makers in the US, the less established and less profitable EV makers.

In other words, it is going to solidify Tesla's position as the market leader. And the final implication, which I'd like to get your reaction to, is that Musk might be able to advise on autonomous driving regulations. That's one of the biggest hurdles for Tesla and the RoboTaxi mission. So if Elon Musk has one foot in the White House and the other at Tesla, it could be that he'll be able to fast track his vision of the robot taxi fleet.

And that is certainly what investors are pricing in right now. So Scott, let's get your reactions to Tesla as a winner of this Trump administration. Well, first is in terms of the broader market stocks represent essentially how corporations and management and the wealth you're doing who control or own 90% of stocks. And essentially the reason the stock market is rallying is there's an anticipation of a tax cut

or an extension of the corporate tax cuts which will increase earnings and thereby logically increase the value of the shares. Now, what the Harris campaign was unable to do which seems fairly obvious to me, is that all that's happening is the following. The stock market has gone up. The credit markets have actually gone down in the sense that the 10-year, the yield has

gone up and the bonds on the 10-year have gone down. Why? Because the credit markets look long-term and say, okay, we think that Donald Trump is gonna be inflationary. And the dots that I don't think people have connected is the following. This market rally is essentially a transfer of wealth from you to me.

Because all that's happening here is Trump is signaled and the market believes him, he's gonna cut taxes on corporations. He is not going to fund that. My prediction will be it'll be deficit funded, meaning the stocks I already own are up substantially the last two days, Ed, on anticipation of a bigger deficit, which will increase your interest rates and lower your stock returns when you're my age and own stocks.

So all the market is saying right now and doing right now is transferring wealth from people your age to people my age. And the credit markets recognize this and yields have gone up. So I think the Harris campaign was totally incapable of connecting the dots and saying, we need to stop the transfer of wealth from young to old. In terms of Tesla, my understanding is he spent about $120 million on the Trump campaign

and his wealth increased, I think, something like $15 billion. The best investment, the best trade of this year was Elon Musk participating, going all in and giving a hundred and, I think it was $19 million to the Trump campaign. He's already got 15 billion back because people assume that he's all in. Trump loves him. Trump is a kleptocrat and Trump will give Tesla government contracts.

And this will just be really good for Elon, who's going to get to say, I like this regulation because it hurts BYD. I don't like this one because it would hurt me. This is basically the market says Tesla is about to become a recipient on the good end of a kleptocrat here known as the Trump administration. I'm just waiting for all the comments to say that you have Trump derangement syndrome, but please, if you're going to make an argument against that, I just hope that people ground it in an actual argument that's based in facts. Because I think what you've said is completely fair and that's exactly what the market is pricing in right now.

Well, it doesn't make me out of that. In the last two trading days, I have made a fuck ton of money. Yeah. And by the way, everyone says, why are you complaining? You're going to get richer. It's like, yeah, I know we're going to get richer for now if we own a bunch of stocks.

I'm getting rich, er, on your credit card. Yes. Nothing is fundamentally changed about the R and D or the education or innovation or anything that's actually fucking sustainable in this country. Yeah. We're not going to produce smarter kids or fewer depressed young adults or create R&D for our university. None of that is here. This is simple. He's going to run up your credit card

to reduce the taxes on companies I own shares in presently. Great. And then if I live long enough and I probably won't, people are gonna have to pay the taxes on poverty, increased incarceration, and exceptional interest rates when the Chinese don't show up or do show up and say, we want 10, 15, 20% yield

if you want us to continue buying your treasuries, which is gonna crowd out all investments and forward-leaning investments, technology, R&D, education, because basically our entire budget, by the time you are my age and have any real money, is gonna go two places, to seniors who are unproductive through entitlements,

or to paying the interest on our debt. This is nothing but pulling prosperity forward from younger people to me. So yeah, it feels good. I'm gonna enjoy it. It is bad for America. Exactly. Let's move on to another winner of this

new Trump administration, which is the bank stocks. So shares of JP Morgan, Bank of America, Citigroup, Goldman Sachs and Morgan Stanley all soared on the election news. Goldman Sachs and Morgan Stanley rose as much as 13%. In addition, private equity firms rose such as KKR and Blackstone. Blackstone hit a record high. So in other words, this was a big win for banks and for financial services.

Why? Because again, the expectation is that Trump will significantly roll back financial regulations. And as we've discussed, M&A has been down over the past few years. There are likely a lot of factors contributing to that, but many believe that the biggest one is because of regulation from people like Lena Kahn at the FTC. Many believe that Lena Kahn, who we had on this podcast, will be out of a job in this administration. So in sum, looser regulation leading to more M&A,

leading to larger investment banking fees, and so more revenue for the big banks. I assume you're gonna have a similar take to what we just said, but what's your reaction to the soaring market values of the bank stocks? A move of 12 and 13% among JP Morgan and Wells Fargo is much more dramatic than a 20 or 30% move in a tech stock.

These companies' volatility or the Sharpe ratios are much lower. These are huge moves for these companies because it's the perfect storm for them. One, less regulation. We can go buy small banks and become even bigger and bigger and become way too fucking big to fail, which is bad for the economy. So less regulation. I probably won't have the same stress tests that Elizabeth Warren and, and Sarbanes-Oxley, we might roll back some of that shit so I can make more loans with less scrutiny. I can start acquiring more companies and with interest rates going up because of

an inflationary presidency, with Donald Trump and the anticipated deficit spending, such that I get richer, or the incumbents get richer, the spreads on loans will go up. So if you're loaning out money on 8% mortgages, you get to borrow at 5.5%. Your spread is 250 basis points. Whereas three years ago, when you were taking out loans at 2.38% and borrowing money at 1.5% for them, you're only getting 84 bips of spread. So this is the perfect storm, less regulation. We get bigger and bigger, too big to fail, more spread on our loans.

This is, I mean, this is nitro me glycerin for banks. Yep. And then our final winner here, we have small cap stocks. So these are public companies with smaller market caps, generally speaking, a market cap below $2 billion. These stocks ripped off the election result. The Russell 2000, which includes many of those smaller companies, rose 6% to its highest in nearly three years.

So what is the market expecting here? Well, one, Trump is reducing the corporate tax rate. So that benefits all American corporations, at least in the short term. As for small caps in particular, many of these companies are very US-centric. So their supply chains are not as global as some of these larger corporations.

They're not multinational in the same way that a company like Amazon is. They do the majority of their business in the US. And the expectation is that with Trump and his more isolationist policies, in addition to these global tariffs that we've talked about, we're going to see more investment in companies who do their business in America and America alone. So that, generally speaking, should benefit small caps. Scott, your reaction to the increase in small cap stocks.

It's a really interesting point. I hadn't, I understood that, okay, lower taxes good for these companies. Tax cut puts more money in people's pockets. So stimulus or at least short-term stimulus. I hadn't, I hadn't seen what you just saw and it's absolutely correct. And that is small cap companies tend to probably get the disproportionate of on all of the revenue domestically. They're less hurt by tariffs. Cause what happens in a tariff, if we put 60% tax on consumer goods coming in from China, they respond.

And if I'm selling a lot into China, I get really hurt. But if I'm just a domestic producer, I'm not insulated from tariffs, but I'm not as badly hurt by a multinational in terms of a trade war. Yeah. And just to be clear on my opinion here, this is an outcome that I actually like. Like I think this is generally speaking, a good thing, the amount of concentration of capital and power to the top few companies as reflected in their market cap, I don't think has been a good thing. Let's just do one more winner here. It's probably worth mentioning, which is cryptocurrencies. So Bitcoin just hit a record high.

The expectation is that Trump is going to have a lot looser and more lenient or kind of regulation to cryptocurrencies. Scott, your reaction to that final winner, particularly Bitcoin. I wouldn't have been surprised if the following conversation took place. He said to the crypto brothers and Andreessen Horowitz, like you guys figure out a way to raise me a billion dollars. I'm going to fire Gensler and I'm going to announce not only would be less regulation, but on the demand side, I'm going to announce a trillion dollar, I don't know, a hundred billion dollar fund that invests in, you know, I'm going to do something that puts not only limits regulation,

but creates more demand for this for, for cryptocurrencies. So I can just see him saying, guys, you raised me a billion dollars. I'll take Bitcoin to a million. And this is how I'm going to do it. I'm going to fire that pain in the ass, Debbie Downer Gensler. And wouldn't you like it if all of a sudden Bitcoin became the one of the default currencies or we tried to give it some sort of dollar backing or I don't know, something that makes it. I'm sure the crypto community is out of all kinds of things that would be great

to legitimize this market. So what are you going to see? I think you're going to see Bitcoin go up substantially. You're gonna see venture capital firms start deploying capital against blockchain and crypto companies. And unfortunately, the downside will be a lot of tears in an unregulated market that attracts

a lot of maverick cowboys, which has a fair share of grifters in it. And the grift is gonna be grifting with a lack of oversight from the SEC. You know, there will be some innovation here. There is a lot that can be done. And a lot of intelligent people said it was overregulated and we needed to kind of let these horses

run a little bit more. I think that's a valuable argument or a legitimate argument. But you're just gonna see with the total absence of regulation, which is what I think you're gonna see here here, you're just going to see, you know, the Miami coin again, or the Ed Elson coin, or there's just going to be all kinds of shit. That's a good idea. Actually, you like that? I'll work on that. Yep. As you know, I'm an investor in ledger, which is a cold storage hardware wallet. 12% of all crypto

stored on these things. You can also trade on it. I would imagine the value of that company went up 30% in the last two days, even though it's a private company. So this is a big win for that community. Gary Gensler, do you think he's around in 12 months? He's absolutely gone. He's on the green mile. The more interesting question is whether Lena Kahn survives because she actually has fans on both sides of the aisle.

And my prediction is she actually survives. I think JD Vance quite likes her, right? So does Matt Gaetz. Yeah. Now she is an antitrust, she's a trust buster, but I think this issue is so complex that I think Trump's gonna get bored of it and just say, oh fuck, leave her in place.

And also having, I just don't think he has the patience to deal with this. And everybody who advised Trump or everybody who was close to him, when someone would come in and talk to Trump, they would say the following, fewer words, more pictures. You were literally told on some of the most complex issues, he likes pictures and very few words that the guy literally doesn't read with supposedly his reputation. And I imagine talking about the complexities of an antitrust case or the monopoly maintenance case of Google and what would, if they didn't do it, what would it mean? He's also himself, President-elect Trump,

does not like these companies. He has been very aggressive and very upset with Metta and Alphabet. So if he can soften his image and keep the young woman in that position who's going after them, I think she survives and she's one of the few people that has something resembling bipartisan support. So I think it's going to be Chairperson Khan for a while. We'll be right back. And if you're enjoying the show so far, hit follow and leave us a review on Profgy Markets. Support for this show is brought to you by Nissan Kicks. It's never too late to try new things, and it's never too late to reinvent yourself.

The all-new reimagined Nissan Kicks is the city-sized crossover vehicle that's been completely revamped for urban adventure. From the design and styling to the performance, all the way to features like the Bose Personal Plus Sound System, you can get closer to everything you love about city life in the all-new, reimagined Nissan Kicks. Learn more at www.nisonusa.com slash 2025 dash kicks. Available feature,

Bose is a registered trademark of the Bose Corporation. Support for the show comes from Betterment. Do you want your money to be motivated? Do you want your money to rise and grind? Do you think your money should get up and work? Don't worry, Betterment is here to help. Betterment is the automated investing and savings app that makes your money hustle. Their automated technology is built to help maximize returns.

Meaning, when you invest with Betterment, your money can auto adjust as you get closer to your goal, rebalance if your portfolio gets too far out of line, and your dividends are automatically reinvested. That can increase the potential for compound returns. In other words, your money is working like a dog while you can be sleeping like one and snoring like one too. You'll never picture your money the same way again. Betterment, the automated investing and savings app

that makes your money hustle. Visit betterment.com to get started. Investing involves risk. Performance is not guaranteed. started investing involves risk, performance is not guaranteed. Support for this podcast comes from Anthropic. You already know that AI is transforming the world around us, but lost in all the enthusiasm and excitement is a really important question.

How can AI actually work for you? And where should you even start? Claude from Anthropic may be the answer. Claude is a next-generation AI assistant, built to help you work more efficiently without sacrificing safety or reliability. Anthropic's latest model, Claude 3.5 Sonnet, can help you organize thoughts, solve tricky problems, analyze data, and more. Whether you're brainstorming alone or working on a team with thousands of people, all at a price that works for just about any use case. If you're trying to crack a problem involving advanced reasoning,

need to distill the essence of complex images or graphs, or generate heaps of secure code, Claude is a great way to save time and money. Plus, you can rest assured knowing that Anthropic built Claude with an emphasis on safety. The leadership team founded the company with a commitment to an ethical approach that puts humanity first.

To learn more, visit anthropic.com slash Claude. That's anthropic.com slash Claude. Claude. We're back with ProfGMarkets. Let's move on to the losers. So our first loser on the list here is clean energy stocks. So solar stocks plummeted, wind energy stocks plummeted. Basically all the renewable stocks tanked after this result. Why?

Pretty expected. Trump wants to put these renewable energy projects on hold. He wants to leave the Paris climate agreement. He wants to repeal the inflation reduction act. He wants to scrap our offshore wind projects that obviously harms the revenues of clean energy companies. It helps fossil fuel companies. So we've seen stocks like ExxonMobil up, natural gas companies like EQT and then Tero, they also rose pretty sharply. I think most people understand this, so let's not dwell on it, but perhaps you

have a brief thought on the fact that clean energy is getting a little bit taken to the woodshed right now. I woke up on November the 5th and I thought, let me get this, two really qualified women have been beaten by a man who is a convicted felon, inspired an insurrection and has been found guilty of rape. I feel like there's just no getting around it. The misogynist tendencies, and I don't use that word lightly in the US, still runs pretty deep.

And strangely enough, I think it's affected here and that is anything associated with estrogen, anything that's seen as feminine in its energy quality, wind, solar. Oh, you pussy ass bitch, I'm not interested in wind and solar. However, I actually think in a strange way, this is going to be really good for nuclear because nuclear for whatever reason is seen as badass. Wait, didn't that fry a bunch of Russians in that whole Chernobyl? For some reason, nuclear has a macho feel to it. And that's, I realize how ridiculous this election was one feel to it. And that's, I realize how ridiculous this election was won on a very manosphere impression of masculinity. When I look at the results, who showed up, who didn't, no one gave a shit about bodily autonomy. And I know that's hard to say, but they didn't believe president

Trump was that pro-life, five of the seven referendums on bodily autonomy passed. So people think the States are handling it. They just didn't care more. Fewer women voted for Harris than voted for Biden. Bodily autonomy played, played no role. What showed up was young men, fears about how young people are doing and an embrace of the Manosphere that you Democrats are too fucking sensitive. Stop lecturing us. Stop acting so high and mighty.

Stop being such, stop being such snowflakes and so offended at everything for us. Stop being so feminine. It's like this giant fear and upset that we're like this, our society is becoming feminized. I think that's a really good point, especially when it comes to certain companies and people, like the thing that Elon Musk cracked was that he figured out a way to make electric vehicles feel macho and masculine. And as soon as he did that, suddenly the people like Trump were on board.

I think that's definitely true of nuclear. I'd love to somehow create a rubric of which companies and which products are more feminine versus masculine. And I bet we could figure out a perfect line between Democrat and Republican support for those initiatives, right? I like that, yeah. My next podcast is just gonna be called Gorilla Seamen.

That'll win them over. Suddenly we'll stop being beta snowflakes as soon as we call it that. The new government contract podcast, Gorilla Seaman. I really liked that take. Let's move on to our second loser, which is companies that are exposed to this new tariff policy. So these are companies whose businesses are reliant on importing goods into the

U S so that's a very broad category. There are many types of companies who fall into that category. So in retail, you've got companies like Williams Sonoma, you got Best Buy, Nike. These are companies that have highly international supply chains. And so when the tariffs come about or if the tariffs come about, it'll just make everything they do more expensive. We're also, people said we were going to see it in tech. tariffs come about or if the tariffs come about, it'll just make everything they do more expensive. Also people said we were going to see it in tech.

So there was some concern that these tech companies that import their chips from abroad would be affected. That was a big concern. We actually haven't really seen that yet. Some tech companies dropped a little bit on the election result, but broadly speaking, they're bouncing back. So the jury is still out on whether this administration and the tariff policies will benefit or harm tech. What is clear though, is that if you are an American company and you rely heavily on an international supply chain, you are very nervous right now. You are trying to bring

all of your supply chain, you're trying to bring everything back to the U S. So Scott, your reaction to tariff exposed companies being a loser in the Trump administration. Republicans are supposed to be the, you know, the more fiscally minded or better on business, right? And I can see at least a handful of Republican senators and or representatives saying, you know, 88% of our gifts under the Christmas tree,

the good consumers work all year to be able to afford, come from China and we don't need to raise costs. I think there will be tariffs. The ones in place will either stay or get increased. I don't think it's gonna be anything near what he's proposing because anyone who can do math is Is gonna be able to find five or seven Republicans to say this is a really bad idea And the way for you to look really smart is to say this would hurt the good people of Alabama and raise their costs

You know their costs for whatever tires or tractors by 22%. And the farmers in Iowa would raise the costs of whatever it is, feed imported from, you name it, Ecuador by 15. As soon as people actually do the math and see what's gonna happen in terms of impact at a ground level, you're gonna see all sorts of constituents pop up and say basically, what the fuck?

And it's gonna stiffen the backbone of some Republicans to say, I am not down. And the margins, even if they get control of all three branches, the margins here are gonna be so narrow that on a topic like this, I think that Democrats will be able to find a few defectors to kind of cross their arms and hold firm on tariffs. I don't think tariffs are going to be nearly at the scale that he's threatening.

Some companies that are being hit a little harder related to this tariff issue, foreign stocks, emerging market stocks, are companies in Europe, in Mexico, in China, they're down. Many of these companies rely on selling stuff to Americans. Let's just focus on Germany as an example. BMW is down, Porsche is down, Mercedes is down, Volkswagen is down. 13% of Germany's cars are exported to the US. This is not great news for foreign car makers. If we look at Europe as a whole, the US accounts for one fifth of their exports.

They shipped half a trillion euros worth of goods to America last year. That number should come down under Trump. So you just sort of think of every foreign staple that we enjoy in America, whether it's beer from Mexico or computers and smartphones from Japan or even GLP-1 drugs from Denmark. If you're in that business and you need to ship it over to America, you are hurting at

least a little bit right now based on the market's reaction. Scott, your reaction to what's happening to foreign stocks right now? Well, I think you have to discern the difference between kind of foreign supplies, if you are foreign suppliers and then foreign competitors. And that is, I think there will be, he'll see a political win in showing up to Michigan and Detroit and saying, we're going to increase demand for, for Ford because we, the trade relationship with Germany is asymmetric. So I'm announcing a 15% tax on all cars coming from Germany.

Whereas if he were to announce new tariffs on metal coming in from Canada, that's just going to increase the costs for Ford. I think that will be more politically unpalatable despite the fact they both kind of end up in the same place and that is an increased cost on U.S. consumers. But again, I don't know if, it would be much easier for him to put a tariff on a product where there is an American substitute, at least in the short run. Not recognizing over time all that that means is that American companies have less competition, take advantage of that and increase their prices, thereby raising prices and creating inflation on American consumers. But I think in the short run,

it's just much easier to tax a competitive product than it is, feed coming in from Ecuador that raises the price, raises the costs of goods for farmers. It's a question. It feels very similar. It is very similar to what happened with Brexit where the UK was like, we can do this all on our own. So let's just cut off ties and we're going to be fine.

And the question here is that, it's like, okay, I'm down with the idea of bringing everything to America. And the question that we're asking right now is, can we do everything truly on our own? Can we just sort of put a giant tax on everything that comes from abroad? Or do we actually need these countries and do we rely on them to sustain our society? And I think it's a more, it certainly was not a valid question to be asking in the UK. The UK was completely dependent on the rest of Europe and that's why it's struggling so much right now. And I think it is a more valid question when it comes to the U S but that is

certainly the direction we're moving in here. We're basically saying, we don't need all you guys. We can do it on our own. I think what we're about to find out is whether that is indeed true. Our final loser that I've got here. This is the most interesting in my opinion, the housing market generally, and specifically so real estate stocks.

So you've got real estate brokers like Redfin, like Zillow, Compass, they're all in the red right now. They all reacted quite badly to the election result. You've got real estate services, companies like CBRE and Cushman and Wakefield, they all fell. You've got home building stocks. So companies like D.R. Horton, which constructs houses, the largest American construction house construction company, and companies like Lennar, all of the home builders are down right now. And this is the

most interesting to me because basically what the market is saying, the expectation despite Trump's promise to bring down housing costs, is that buying a house is about to get even more expensive. So we've seen yields rise in expectation of higher inflation as a result of the tariffs that we've just discussed. And when yields rise, that means that rates rise. And when rates rise, that means you're paying a larger mortgage payment. So that's sort of an accepted principle in the markets right now.

We're going to see higher mortgage rates. So to counteract that, Trump needs to figure out a way to significantly reduce housing prices. He's laid out some plans, you know, he wants to make it easier to build, which I think we both agree with is a good thing. However, the tariffs are expected to increase the cost of goods needed to build houses, that's one problem, and the deportation and immigration crackdowns are expected to make the construction labor market even tighter, which means it'll be even more expensive to build a home.

So what the market is telling us right now is that mortgage rates are going to go up and housing prices are going to go up, which is just a total nightmare for someone like me who one wants to buy a house and two, who believes that the cost of housing is basically one of the biggest issues at least in the country right now. So Scott, your thoughts on what this new administration could do to the housing market. Well, just as we said, this is the perfect storm of good things for bank stocks.

It's the perfect storm of bad things for housing because his fiscal policy, what we know about it, is it could be inflationary. The credit markets have already predicted because his fiscal policy, what we know about it is it could be inflationary. The credit markets have already predicted that interest rates are gonna go up. The 10 years already going up. So one of the things that has made housing

increasingly unaffordable is a massive increase in interest rates, right, in mortgage rates. And then if you, I remember during COVID, I was building a house and the guy said, we can't get garage doors. He said, and he looked at the pulley on the automatic, you know, when you press it and there's an engine and a chain, the pulley between the chain and the door,

he goes, that thing's made in Czechoslovakia and it's all closed because of COVID. If that thing, I mean, your washing machine, so many parts, even the lumber, so many things in your house come from foreign entities, that the idea that he's going to do anything resembling this level of tariffs, so let me get this, my mortgage, my interest rate on my mortgage is going to go up and the cost of build is going to go up, something's got to give here because this is one place you're going gonna see a pretty significant gag reflex

from the US population. If all of a sudden it becomes obvious that an already vastly unaffordable housing market, where just in the last five years it's gone from two thirds of Americans can afford a home to just one third. If that goes down any further because of Trump's tariff policy

or because inflation starts to send mortgage rates up, I think he's going to get a very swift message back from the American people that look boss, housing is a crisis. We need all hands on deck, more permits, more housing. And again, in addition to supply, the cost of building and the mortgage rate are really important. So this is the perfect storm of bad things for housing. I don't believe a lot of this. If you look at the markets,

the markets have said it's going to be a divided government, that he's not going to be able to push through other than maybe extending the tax cuts. That's how I read it. They will continue to favor rich people and corporations. But a lot of this stuff is not going to happen at nearly the scale that he's threatened. Yeah. That's all I've got for the winners and losers here. I also just do want to point out that what we have said about this has been

based on the market's reaction. So what we're explaining right now, like your take on the idea that mortgage rates and housing prices are going to go up. That's not like our hot take. That's what the market is telling us right now. We don't know what's going to happen. Like I hope, and I would be really happy if Trump figures out a way to get these, the cost of housing down.

And I'm so for it. Like I'm, I mean, a hundred, I'm a hundred percent in support of that happening. I'm in support of him bringing inflation down. I mean, I want things to work out. Uh, do you have any final thoughts or takeaways from this winners and losers session? You know, what I, what I would say across a lot of this stuff is I think it'll modulate nothing's ever as good or as bad as it seems. I think the market tends to, you know, the

pendulum is never kind of the bottom. I think it's probably overreacting one way or the other. So I would think the stocks that have been hammered the most are probably buying opportunities and I think the stocks that are up to most, you know, I don't know, I'd be careful going into them. I just, I'm, I'm, I think we're going to find that the intransigence, the multiple branches of government, the slow grinding gears of our,

I don't even call it our democracy, but our capitalist system, and the fact that you're gonna have a president that I'm not sure is gonna have the attention span to enact a lot of this. I mean, to a certain extent, what's strange is, kind of a month in, he's the lame duck president.

So I don't think the winners are going to win as much here, and I don't think the losers are going to lose as much as we think. All right. Let's take a look at the week ahead. We'll see the consumer price and producer price indices for October, and we'll also see earnings from Disney, Alibaba, and Home Depot. Scott, do you have any predictions for us? Scott McIlvenna My prediction is that Intel will either be acquired or go private in the next, I don't know, six months. I think this is such a storied firm. There are few firms that have

fallen further faster than Intel. And this sector has added a ton of market capitalization, except the leader, the market leader, the dominant player, that the one that was held up as the icon of great management has consistently thrown up on itself for the last 20 odd years. And I think the stock's gotten to the point where there's so much IP, so many supplier relationships, so few companies that can produce this type of very complex capital intensive product, heavy design product, and it's trading

at I think, one thirtieth the value of Nvidia, that if this thing shows any pulse, it will triple, except I think the changes in investments it needs to make would be more easily done outside of the purview of the public markets. So if it's not acquired, I think that somebody shows up and takes it private. This episode was produced by Claire Miller and engineered by Benjamin Spencer. Our associate producer is Allison Weiss,

Mia Silverio is our research lead, Jessica Lang is our research associate, Drew Burrows is our technical director, and Catherine Dillon is our executive producer. Thank you for listening to Prof G Markets from the Vox Media Podcast Network. Join us on Thursday for our conversation with Josh Brown. He's back, only on Proffigy Markets. In kind reunion

As the water And the dove flies Hold on one second. Yeah, buddy. Come on in. Yeah, it's all right. Do you want wings or burgers? Wings or burgers? Oh, I love it when mom's gone.

What do you want? I can't decide. Burgers from where? Either Five Guys or Shaysha. Let's do... let's do... let's do... When's mom gonna be home? Is she gonna find out what we ate? No, she's fine.

Oh, then burgers and shake. I want a black and white shake. Five Guys or Shake Shack? Shake Shack. I want a burger and a black and white shake. Great. It's not all good. Okay, don't tell mom. Don't tell mom. Okay. That was adorable. Support for this show is brought to you by Nissan Kicks. It's never too late to try new things, and it's never too late to reinvent yourself. The all-new reimagined Nissan Kicks is the city-sized

crossover vehicle that's been completely revamped for urban adventure. From the design and styling to the performance, all the way to features like the Bose Personal Plus Sound System, you can get closer to everything you love about city life in the all-new reimagined Nissan Kicks. Learn more at www.nisonusa.com slash 2025 dash Kicks. Available feature, Bose is a registered trademark of the Bose Corporation. Support for this podcast comes from Stripe. Stripe is a payments and billing platform supporting millions of businesses around the world, including companies like Uber, BMW, and DoorDash. Stripe has helped countless startups and established companies alike reach their growth targets, make progress on their missions, and reach more customers globally.

The platform offers a suite of specialized features and tools to fast-track growth, like Stripe Billing, which makes it easy to handle subscription-based charges, invoicing, and all recurring revenue management needs. You can learn how Stripe helps companies of all sizes make progress at Stripe.com. That's Stripe.com to learn more. Stripe. Make Progress.