U.S. presidential election results are trickling in, and there is a possibility that neither candidate reaches the 270 electoral votes required to win by the end of the election night, according to Bloomberg. Voters cast their ballots early, in person or by mail. Due to the pandemic, counting, reporting may take longer than usual. While the main war for markets concentrated on the stimulus package, that will mostly affect dollar value, here is how the stock market paradigm can change after the 2020 presidential election. Here is the lowdown of possible effect on both candidates proposed policies:
“Biden’s way”
- Tax cuts and increase capital gains taxes.
Market impact: Moderately negative earnings growth.
Required votes: 51 Senate votes
- Provide additional fiscal stimulus, bigger than republicans propose.
Market impact: positive for corporate earnings. Weak dollar.
Required votes: 60 Senate votes
- Expanding the ACA and creating public options.
Market impact: Positive for ANTM, UNH, HUM, MOH, WCG, CI, CYH, THC, HCA, and UHS.
Required votes: 60 Senate votes - Allow Medicare to negotiate drug prices.
Market impact: Moderately negative for LLY, MRK, BMY, AGN, AMGN, and TEVA.
Required votes. 60 Senate votes - New carbon tax, ban offshore drilling, but not fracking.
Market impact: Moderately negative for XOM, CVX, BP, COP, OXY, WLL, SM, XOG, CLR, MRO, HAL, and SLB.
Required votes: 60 Senate votes and some executive authority - Climate change plan.
Market impact: moderately positive for TAN, FSLR, SPWR, JKS, CSIQ, RUN, FE, NEE, NLR, EXC, and CCJ.
Required votes: 60 Senate votes - Increased banking regulation.
Market impact: Moderately negative for XLF, BAC, C, WFC, GS, MS, USB, and PNC.
Required votes: Executive authority/Court challenges - Abolish private prisons.
Market impact: Adverse negative on CXW, GEO.
Required votes: 60 Senate votes - Infrastructure.
Market impact: Moderately positive for FLR, KBR, ACM, GVA, USCR, VMC, MLM, and CAT.
Required votes: 60 Senate votes - Increased technology regulation.
Market impact:Moderately negative for AAPL, FB, AMZN, GOOG, and TWTR. Required votes:Executive authority/court challenges - Marijuana discrimination, but not legalization.
Market impact: Moderately positive for ACB, TLRY, CRON, CGC, and MJ. Required votes: 60 Senate votes
- Two years of free college and expanded debt relief.
Market impact: Moderately positive for NAVI, and SLM.
Required votes: 60 Senate votes - Raise minimum wage to $15/hour.
Market impact: Adverse negative for DG, DLTR, BIG, FIVE, WMT, and TGT. Required votes: 60 Senate votes - Increase defense spending.
Market impact: Moderately positive for GD, NOC, LMT, BA and HRS.
Required votes: 60 Senate votes
- To crackdown on China and re-evaluate tariffs.
Market impact: Moderately negative on Semis, retail industrials, autos, and agriculture.
Required votes: Executive authority.
“Trump’s approach”
- Current tax policy stays in place.
Market impacts: Moderately positive earnings growth.
Required votes: No action needed - Provide fiscal stimulus.
Market impacts: Moderately positive earnings growth. Weak dollar
Required votes: 60 Senate votes - Deregulation in energy and expand oil drilling.
Market impact: Strong positive earnings on XOM, CVX, BP, COP, OXY, WLL, SM, XOG, CLR, MRO, HAL, and SLB.
Required votes: Executive authority/Court challenges
- Repeal/ Replace Affordable Care Act. Market impacts-Adverse negative on ANTM, UNH, HUM, MOH, CI, CYH, THC, HCA, and UHS. Required votes-60 Senate votes
- More regulation on drug prices.
Market impact: Moderately negative on LLY, MRK, BMY, AMGN, and TEVA. Required votes: Executive authority - No assault weapons ban.
Market impact: Moderately negative on SWBI, RGR.
Required votes: No action needed - Banking deregulation continues.
Market impact: Strong positive impact on XLF, BAC, C, WFC, GS, MS, USB, and PNC.
Required votes: Executive authority - Infrastructure.
Market impact: Moderately positive on FLR, KBR, ACM, GVA, USCR, VMC, MLM, and CAT.
Required votes-60 Senate votes - Impose trade tariffs.
Market impact: Adverse negative for semis, retail, industrials, autos, and agricultural. Long term good for trade balance.
Required votes: Executive authority - Increased technology regulation.
Market impact: Moderately negative on AAPL, FB, AMZN, and GOOG.
Required votes: Executive authority
- Increase defense spending.
Market impact: Moderately positive on LLL, GD, BA, NOC, and LMT.
Required votes: 60 Senate votes.
U.S. stocks and futures are currently gaining. SPY is up 1.77%, S&P 500 is up 1.78%, NASDAQ is up 1.94%
