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

Phunware

17/07/2024 17:53

(Adds background in paragraphs 10, 15, 21, 22, 30)
       July 17 (Reuters) - Investors are closely watching
stocks that could be impacted by the outcome of the Nov. 5 U.S.
presidential elections, especially those more exposed to
government policy actions such as banking and clean energy.  
    While U.S. President Joe Biden and Republican presidential
candidate Donald Trump are locked in a close election rematch, a
two-day Reuters/Ipsos poll showed that Trump had opened a
marginal lead in the race to the White House after surviving an
assassination attempt.
    Here is a list of stocks and sectors that are likely to be
impacted if either Trump or Biden serve a second presidential
term:
    
    FINANCIALS
    UBS analysts are accounting for the prospect of less
stringent capital and liquidity rules, and easing financial
regulation under Trump's second term as U.S. president,
potentially benefiting the banking industry. 
    Banks, including JPMorgan & Chase  JPM.N , Bank of America
 BAC.N , Wells Fargo  WFC.N , Discover Financial  DFS.N ,
KeyCorp  KEY.N  and Synchrony Financial  SYF.N , are seen as
some of the likely winners by the brokerage.
    
    CRYPTO AND BLOCKCHAIN-RELATED COMPANIES 
    Crypto stocks are expected to benefit from Trump's re-entry
into the White House as he is widely seen as being crypto
friendly.
    Stocks, including Coinbase  COIN.O , Marathon Digital
 MARA.O  and Riot Platforms  RIOT.O , have surged tracking gains
in bitcoin after a failed assassination attempt on the former
president raised his odds of winning the elections in November. 
    U.S. regulators have cracked down on the industry with a
slew of federal enforcement actions under the Biden
administration.
    
    SOLAR STOCKS
    J.P.Morgan analysts see risks to spending on green energy
under a new Trump administration, which is expected to focus
more on maximizing fossil fuel output instead of fighting
climate change. 
    UBS expects incentives for solar manufacturers such as First
Solar  FSLR.O , NextEra Energy  NEE.N  and Sunrun  RUN.O  to
stay if Biden is re-elected.
        
    CLEAN ENERGY AND OIL COMPANIES
    Biden has made protecting the environment a core part of his
economic plans.
    Continued support for electrification and clean fuel
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 will
continue to drive 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.
    
    DOMESTIC MANUFACTURERS
    Both men have broadly used tariffs to protect the U.S.
industry. A new Trump administration is expected to be much more
protectionist in terms of import tariffs as he has proposed
putting a 10% duty on all imports. 
    As president, Trump started a tariff war with China and as a
candidate this year the Republican nominee has suggested he
would impose tariffs of 60% or higher on all Chinese goods.
Biden has largely kept his predecessor's tariffs in place, and
ratcheted up others.
        "The consumer discretionary sector is exposed in that
environment," UBS analysts say.
  
    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 linked 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 such as Geo Group  GEO.N  and
CoreCivic  CXW.N  may benefit from Trump's re-election, on
promises of a crackdown on illegal immigration and restrictions
on legal immigration, 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,
potentially helping drugmakers Eli Lilly  LLY.N  and Merck
 MRK.N , as well as health insurers such as Humana  HUM.N  and
UnitedHealth  UNH.N .
    Control on drug prices was implemented under the sweeping
Inflation Reduction Act by Democrats and Biden.
    
    M&A-RELATED BENEFICIARIES
    Trump may take a more lenient approach to antitrust
regulation enforcement, 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 semiconductors,
UBS expects a second Trump government to drive support for
domestic semiconductor manufacturers including Applied Materials
 AMAT.O , KLA Corp  KLAC.O , Intel  INTC.O  and Texas
Instruments  TXN.O . 
    
    AGRICULTURE
    With the likelihood of more tariffs on Chinese imports under
Trump, farmers are expected to receive more federal assistance
for lost exports amid a potential trade war. These initiatives
could help agricultural equipment makers and suppliers such as
Deere and Co  DE.N  and Tractor Supply Company  TSCO.O , UBS
analysts say.

 (Reporting by Purvi Agarwal and Medha Singh in Bengaluru;
Editing by Pooja Desai, Anil D'Silva and Maju Samuel)
 ((Purvi.Agarwal@thomsonreuters.com;))