Factbox: Stocks to watch as Biden and Trump vie for presidency

Phunware

03/07/2024 12:47

July 3 (Reuters) - The first U.S. presidential debate
saw President Joe Biden turning in a fitful performance,
especially at the beginning, as he exchanged barbs with former
President Trump on abortion, immigration, the wars in Ukraine
and Gaza and even their golf games.    
    Both candidates defended their handling of the economy ahead
of the Nov. 5 election rematch, which opinion polls show has
virtually been a tied race for months. 
    Here is a look at the stocks that are likely to be impacted
and how, depending on who comes to power:
    
    
    FINANCIALS
    UBS accounts for the prospect of less stringent capital and
liquidity rules and easing financial regulation under a second
Trump administration. 
    The brokerage sees benefits for big banks like JPMorgan &
Chase  JPM.N , Bank of America  BAC.N , Wells Fargo  WFC.N  and
smaller lenders including Discover Financial  DFS.N , KeyCorp
 KEY.N  and Synchrony Financial  SYF.N .
    
    
    SOLAR STOCKS
    J.P.Morgan analysts believe opposition to the green
revolution by Trump and other Republicans could pose a risk to
investments in clean energy manufacturing, facilitated by the
tax incentives in the Inflation Reduction Act of 2022. 
    UBS sees a second Biden government keeping those incentives
intact for solar manufacturers such as First Solar  FSLR.O ,
NextEra Energy  NEE.N  and Sunrun  RUN.O .
    
    
    CLEAN ENERGY AND OIL COMPANIES
    Continued support for electrification and blue and green
hydrogen production under a Biden administration could boost
stocks such as Eaton  ETN.N , Quanta Services  PWR.N , Tesla
 TSLA.O  and Air Products and Chemicals  APD.N , according to
UBS.
    Existing incentives from the present government would
continue driving advantages for energy-efficient product
manufacturers such as Johnson Controls  JCI.N  and Trane
Technologies  TT.N , as well as waste management companies with
recycling infrastructure such as Waste Management  WM.N  and
Republic Services  RSG.N .     
    However, increased oil and natural gas investment, more
drilling activity and higher natural gas exports could benefit
producers such as Exxon Mobil  XOM.N , Cheniere Energy  LNG.N 
and ConocoPhillips  COP.N  under Trump 2.0.
    
    
    TARIFFS
    A second Trump administration is expected to be much more
protectionist in terms of import tariffs. "The consumer
discretionary sector is exposed in that environment," UBS
analysts say.
    As president, Trump started a tariff war with China and has
floated tariffs of 60% or higher on all Chinese goods and a 10%
or higher universal tariff on all imports, a move he says will
eliminate the trade deficit.
    U.S. tariffs on Chinese imports could help domestic
manufacturers, namely legacy carmakers Ford  F.N  and General
Motors  GM.N  and steel producers such as Nucor  NUE.N  and
Steel Dynamics  STLD.O , UBS analysts say.
    
    
    TRUMP-RELATED STOCKS
    Investors expect stocks related to Donald Trump to move in
tandem with the chances of his winning the presidency. These
include Trump Media & Technology  DJT.O , in which the former
president owns a majority stake, software firm Phunware  PHUN.O 
and video-sharing platform Rumble  RUM.O .
    
    
    PRISON OPERATORS
    U.S. prison operators like Geo Group  GEO.N  and CoreCivic
 CXW.N  are potential beneficiaries of a second Trump
administration, on promises of a crackdown on illegal
immigration and restrictions on legal immigration by the
Republican candidate, which could boost demand for detention
centers. 
    
    
    PHARMACEUTICALS AND INSURERS
    UBS sees a lower risk of drug price cuts and an inclination
towards Medicare Advantage in a Republican-dominated government,
which could help drugmakers Eli Lilly and Company  LLY.N  and
Merck  MRK.N , as well as health insurers such as Humana  HUM.N 
and UnitedHealth  UNH.N . 
    
    
    M&A-RELATED BENEFICIARIES
    A second Trump administration would likely take a more
lenient approach to antitrust regulation enforcement in the
world's biggest economy, according to J.P.Morgan analysts. 
    UBS expects banks such as Goldman Sachs  GS.N , Morgan
Stanley  MS.N , Lazard  LAZ.N  and Evercore  EVR.N , which
benefit from M&A activities, to gain from such a policy change. 
    
    
    SEMICONDUCTOR MANUFACTURING
    Given the fierce competition with China on semiconductor
chips, UBS expects a second Trump government to drive support
for domestic semiconductor manufacturing companies such as
Applied Materials  AMAT.O , KLA Corp  KLAC.O , Intel  INTC.O 
and Texas Instruments  TXN.O . 
    
    
    AGRICULTURAL SUPPORT
    As more tariffs on Chinese imports are proposed under Trump
2.0, more federal assistance could be provided to farmers for
lost exports amid the trade war. These initiatives could help
agricultural product manufacturers and suppliers such as Deere
and Co  DE.N  and Tractor Supply Company  TSCO.O , analysts at
UBS say.

 (Reporting by Purvi Agarwal and Medha Singh in Bengaluru;
Editing by Pooja Desai)
 ((Purvi.Agarwal@thomsonreuters.com;))