“Trump is going to win the elections next month, which will be good for the U.S. stock markets,” Daniel Loeb’s hedge fund Third Point wrote in a letter to clients during the third quarter.
Third Point told investors that it thinks Trump’s “America First” policies will lead to more manufacturing in the U.S. and more spending on infrastructure, which will make some materials and goods more expensive.
The hedge fund was founded by Daniel Loeb in 1995. It said that Trump’s policies to loosen regulations will also “unleash productivity and a wave of corporate activity” in the U.S., and that it is now set up to “benefit from such a scenario.”
Third Point said, “Given what’s happened in politics over the last few weeks, we think the chances of a Republican winning the White House have gone up. This would be good for some sectors and the market as a whole.”
Third Point also said it thinks Republicans will win a majority in the Senate. This would make it less likely for a “Blue Sweep” that would bring about “crushing taxes, stifling regulations, and a headwind to growth.”
The flagship TP Offshore fund from Third Point showed gains of 3.9% in the third quarter in a letter to clients. This means that the fund has now gained 13.1% so far in 2024. In the third quarter, the S&P 500 index SPX 0.38% went up 5.9%. So far this year, it has gone up 9.6%.
Third Point said that one of its best performing areas in the third quarter was its 75% stake in privately owned chipmaker R2 Semiconductor. At the end of August, Intel paid R2 Semiconductor a settlement that ended a long-running lawsuit over patent infringement.
Along with KB Home KBH 2.27%, Danaher Corp DHR 0.93%, and utility companies Vistra Corp VST 3.25% and Pacific Gas & Electric PCG 0.07%, the New York fund named these five companies as its top five winners for the quarter.
Third Point said that the top five losers were U.S. store Bath & Body Works (BBWI -0.69%), e-commerce giant Amazon.com (AMZN 1.13%), car parts seller Advance Auto Parts (AAP 1.57%), Alphabet (GOOG) (0.43%), which owns Google, and Microsoft (MSFT) (0.18%).
A hedge fund said that the “Magnificent Seven” tech companies “trailed the broader market (albeit modestly) for the first time since Q4 2022” in the third quarter. Third Point said that “investments in industrials, utilities, materials, and other housing-sensitive stocks” were the main reason for its gains.
An American movie theater chain called Cinemark Holdings CNK -0.48% and a Danish transportation company called DSV DSV -0.53% both bought shares by the money manager in the third quarter.
