With former South Carolina Governor Nikki Haley bowing out of the race for the GOP nomination, we are now primed for a rematch between President Joe Biden and former President Donald Trump.
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The past two occupants of the Oval Office differ markedly in almost every respect. Let’s dive into which sectors and stocks might get a boost from both a Biden Administration and a Trump Administration.
Option 1: Another Biden Term
Another Biden Administration could raise prospects for a number of industries and firms:
- Biden 2.0 may act to expand Medicare and Medicaid programs, benefitting healthcare providers like Humana (HUM) and Molina Healthcare (MOH).
- Biden’s newly announced grant program aimed at building an EV-charging network across the U.S. will continue uninterrupted, which would benefit companies like ChargePoint (CHPT).
- Another beneficiary of Biden 2.0 would likely be solar energy producers like First Solar (FSLR) and Enphase Energy (ENPH).
Option 2: Trump 2.0
President Trump will likely loosen restrictions and regulations, leading to bright prospects for a number of sectors:
- Amazon (AMZN), Apple (AAPL), and Alphabet’s (GOOGL) Google division would each likely benefit from being left alone under a Trump Administration. However, it must be said that all three have done just fine under the current president.
- The Republican candidate has also indicated that he would repeal Basel III’s increased capital requirements, allowing banks like JP Morgan (JPM) and Wells Fargo & Co (WFC) to reach even higher profits.
- Energy giants like Baker Hughes (BKR) and Exxon Mobil Corp (XOM) will surely cheer a backpedaling of environmental rules, as Trump pushes to boost domestic U.S. oil and gas production.
- Trump Administration is also expected to repeal all subsidies to electric vehicle (EV) producers, favoring a market-driven approach to determine the winners. This is expected to be positive for legacy automakers like Ford (F) and General Motors (GM).
Option 3: All-Weather Stocks
There are companies whose prospects are optimistic no matter who is the next president. These include:
- Companies reshoring economically important industries, such as semiconductor production. These include firms such as Intel (INTC) and Taiwan Semiconductor (TSM).
- Industrial firms that are central to the reshoring movement, such as Caterpillar (CAT), Eaton (ETN), and Rockwell Automation (ROK). This also includes engineering services firms like Jacobs Solutions (J), logistics management services like GXO Logistics (GXO), and heavy-equipment-as-a-service providers like United Rentals (URI).
- Firms supplying inputs to infrastructure projects, such as Vulcan Materials (VMC) and RPM International (RPM).
- U.S. aerospace and defense manufacturers like Lockheed Martin (LMT), General Dynamics (GD), and Northrop Grumman (NOC) will likely be playing a large role in global defense efforts for years to come, regardless of who is the next Commander-in-Chief.
The Investing Takeaway
Elections have consequences, for nations and for industries. However, at the end of the day, every company’s prospects depend on their own fundamentals. Make sure to follow these stocks on TipRanks and pay close attention to these data points, regardless of who is sworn in for their second term in office.
