Stocks linked to Donald Trump soared this week even as Chinese markets fell. And the former president's eldest son sees ties to Iowa.
“It's no surprise that China's stock market crashes after Trump wins the Iowa primary,” Donald Trump Jr. told On the Money. “At the same time, patriotic stocks like PublicSq., Truth Social, and Rumble are soaring.”
There was little question about the latter claim following Trump's lopsided victory Monday night.
Truth Social's stock price rose more than 40%, from about $17 a share to about $25 a share.
Public Square, a shopping site that aims to be a conservative alternative to Amazon, jumped 12% to $5.60 a share after the Iowa results. Rumble, which touts itself as a free speech alternative to YouTube, rose nearly 20% to nearly $4 a share despite the overall market downturn.
All three stocks have since fallen, but are still above last week's levels.
On the other hand, China's index CSI300 fell Hong Kong's Hang Seng Index hit its lowest level in two years earlier this week.
Analysts this week blamed China's defeat on a combination of rising debt, slowing consumer demand and a shrinking workforce.
China on Wednesday announced gross domestic product (GDP) growth of 5.2% last year, but investors say the figure was supported by government spending.
But Trump Jr. says the real reason investors are fleeing China is because of the US election.
“Wall Street understands that with Trump back in the White House, the cozy relationship between DEI and CCP is coming to an end,” Trump Jr. added.
Regardless of the relationship with China, investors say the overall market is paying more attention to Trump stocks following Iowa.
“Trump's success shows that Wall Street has a lot of momentum in this space,” said Omeed Malik, the investor who bought Public Square. Published via SPAC. “Wall Street wants a piece of this economy. We're on top of the first inning when it comes to these stocks.”
Malik noted that JPMorgan CEO Jamie Dimon spoke Wednesday at the elite World Economic Forum in Davos, Switzerland, defending some of President Trump's policies.
“We were right about some things about NATO, we were right about immigration to some extent, the economy grew a lot, tax reform worked, and we were right about parts of China,” Dimon said.
As companies including BlackRock become increasingly quiet about DEI and ESG, huge amounts of money could flow into a pro-Trump “parallel economy,” says the director of a fund focused on investing in just these companies. Mr. Malik, who runs the company, predicts. He argues that if Trump secures the nomination, it will likely accelerate, and Wall Street will try to get a piece of it as well.
At the same time, Malik said Chinese stocks (those listed in the U.S. and traded in China) could be hit even further by Trump's inauguration.
“Chinese companies that list on US exchanges will be hurt because they will ultimately be subject to the same requirements as US companies,” Malik said. “Domestic Chinese stocks will also be hurt due to rising geopolitical tensions.”
