The Trump trade is back! US stocks gained overnight led by the NASDAQ Composite which climbed 1.2% due to optimism after President Donald Trump announced a proposal to slash the US corporate tax rate to 20%, down from the present rate of 35%.
Australian investors looking to gain exposure to the US and hedge against the Australian dollar could consider these three shares that are likely to benefit from the Trump trade:
- CSL Limited (ASX: CSL) which earns over 40% of its revenues from the US.
- Cochlear Limited (ASX: COH) which earns over 50% of its revenues from the US
- Westfield Corp Ltd (ASX: WFD) which has 75% of its earnings coming from the US
Foolish takeaway
The proposed tax cuts aren't final and it could be months before they are approved by Congress. Long term investors are better off looking at the fundamentals of the underlying business before making an investment based on a rising US dollar and lower corporate tax bills.
