Carl Icahn Celebrates Trump Victory With $1 Billion Equity Shopping Spree

Long-time Donald Trump supporter Carl Icahn increased his equity holdings by about $1 billion last week following the shocking election result that saw the GOP candidate easily win the White House.

“I would have tried to put a lot more to work, but I couldn’t put more than about $1 billion to work, and then the market got away. But I’m still happy about it,” Icahn said, as quoted by Bloomberg. “The S&P was so liquid — it was unbelievably liquid — the world was going nuts. Last night it was amazing, the world was going into a panic with no reason.”[1]

The billionaire investor, who heads the New York-based Icahn Enterprises, has backed Donald Trump since September 2015. More than one year later, the anti-established GOP candidate would go on to become the 45th President of the United States, sweeping key battle states from North Carolina to Arizona.

Trump’s election “is a positive for our economy, not a negative,” Icahn added. [2]

Icahn was certainly on the right side of the US stock market following last week’s election result. US stock futures were down sharply around midnight Wednesday before staging a massive recovery that may continue for the rest of the week. By the end of day Friday, the Dow Jones Industrial Average had strung together its best weekly performance since 2011 on route to back-to-back record closes.[3]

Financials and healthcare stocks were at the centre of the rally, as investors grew optimistic that Trump’s presidency would result in lower corporate taxes and increased fiscal spending. Trump’s proposed corporate tax cuts are expected to encourage multinationals to repatriate overseas profits and stay based in the United States. Smaller tax brackets also bode well for corporate profitability at a time when Wall Street is just emerging from a painful earnings recession. [4]

Meanwhile, investors with exposure to health stocks were fretting a Hillary Clinton election victory, given the Democratic nominee’s stance on prescription drug costs. The S&P 500’s healthcare sector rose nearly 5% for the week. [5]

Post-election rally notwithstanding, the path ahead for US stocks may be challenging. Trump’s proposed trade policies are unpopular on Wall Street and many analysts are concerned they will harm the US economy over the long haul. Trump’s platform included scrapping the North American Free Trade Agreement (NAFTA) and blocking the passage of the Trans Pacific Partnership (TPP). The latter is arguably the most ambitious trade pact in modern history. [6]

[1] Beth Jinks and Erik Schatzker (November 9, 2016). “Icahn Left Trump Victory Party to Bet $1 Billion on Stocks.” Bloomberg.

[2] Beth Jinks and Erik Schatzker (November 9, 2016). “Icahn Left Trump Victory Party to Bet $1 Billion on Stocks.” Bloomberg.

[3] Sam Bourgi (November 11, 2016). “DJIA Today: Dow Jones Futures Record Best Week Since 2011.” Economic Calendar.

[4] Sam Bourgi (November 11, 2016). “DJIA Today: Dow Jones Futures Record Best Week Since 2011.” Economic Calendar.

[5] Sam Bourgi (November 11, 2016). “DJIA Today: Dow Jones Futures Record Best Week Since 2011.” Economic Calendar.

[6] Sam Bourgi (November 11, 2016). “DJIA Today: Dow Jones Futures Record Best Week Since 2011.” Economic Calendar.

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