Factbox: Stocks to Watch as Biden and Trump Vie for Presidency
The recent U.S. presidential debate showcased a vigorous exchange between President Joe Biden and former President Donald Trump, covering a wide array of topics from abortion and immigration to the wars in Ukraine and Gaza. With the November 5 election rapidly approaching, and polls suggesting a close race, investors are closely watching how the outcome may impact the stock market. Here’s an overview of sectors and specific stocks that could be influenced by either candidate’s victory.
Financial Sector
Under a second Trump administration, the financial sector might expect less stringent capital and liquidity rules. This could benefit large banks such as JPMorgan Chase, Bank of America, and Wells Fargo, alongside smaller lenders like Discover Financial, KeyCorp, and Synchrony Financial.
Solar Stocks
The stance of Trump and other Republicans against the green revolution poses risks to investments in clean energy. However, a Biden reelection would likely preserve the tax incentives introduced in the Inflation Reduction Act of 2022, benefiting solar manufacturers such as First Solar, NextEra Energy, and Sunrun. Companies like Johnson Controls and Trane Technologies, known for energy-efficient products, along with waste management entities like Waste Management and Republic Services, could also see continued advantages.
Consumer Discretionary Sector
Trump’s protectionist stance, including potential tariffs on Chinese goods, could impact the consumer discretionary sector. During his presidency, Trump initiated a trade war with China and proposed significant tariffs that would affect this sector.
Prison Operators
Prison operators such as Geo Group and CoreCivic may benefit from a second Trump term, given his promises to crack down on illegal and restrict legal immigration, potentially increasing the demand for detention centers.
Pharmaceuticals and Insurers
A Republican-dominated government is perceived as less prone to impose drug price cuts and more inclined towards Medicare Advantage. This environment could favor companies like Eli Lilly, Merck, Humana, and UnitedHealth.
M&A Activities
A lenient approach towards antitrust regulations under Trump could benefit banks heavily involved in M&A activities, such as Goldman Sachs, Morgan grotech, Lazard, and Evercore.
Semiconductor Manufacturing
Amid competition with China, both administrations may take steps to support domestic semiconductor manufacturing. Companies like Applied Materials, KLA Corp, Intel, and Texas Instruments might see significant impacts. Additionally, Trump’s proposed tariffs could lead to increased federal assistance for farmers, benefitting agricultural entities such as Deere & Co and Tractor Supply Company.
The stocks highlighted offer a glimpse into how the presidential election could sway various market segments. Investors are advised to keep a close eye on the evolving political landscape to adjust their portfolios accordingly.
