WASHINGTON–The election of Donald Trump as the next president has been a big boon to several financial stocks.
Shares of Fannie Mae and Freddie Mac both rose sharply on a belief the Trump Administration will push to recapitalize the two secondary market players and then release them from government conservatorship.
Both companies have been under control of the federal government since 2008. At one point, prior to the financial crisis, both companies’ shares were trading for as much as $50 a share.
That’s a big departure from their most recent trading prices, which at one point had declined to as low as 98 cents per share. However, on Thursday, Nov. 10, shares of Fannie Mae were up 18% to $2.33, while Freddie Mac was trading at $2.26, a spike of 19%. Those gains followed increases of 23% and 19%, respectively, on Nov. 9.
Meanwhile, shares of San Francisco-based Wells Fargo & Co. also rose last week as investors bet a Trump presidency will lead to less regulation and put a lid on pressure from critics such as Sen. Elizabeth Warren (D-MA) over its bogus account scandal. Wells Fargo’s shares were up more than 5% in the days after the election, recovering all of their declines since Sept. 8, when the bank announced a settlement with regulators.