The stock market has experienced a surge to unprecedented levels since Kamala Harris announced her candidacy for the presidency in July. Speculation arises regarding whether this trend will persist should she secure the White House, with potential outcomes varying across different sectors.
Fortune conducted a survey among analysts and academics to identify which stocks might thrive with a Harris victory, as well as those potentially facing a decline. Notable companies were highlighted.
Sectors to Buy:
Harris and former President Donald Trump have notably divergent views on climate and energy policy. As Vice President, Harris played a crucial role in passing the Inflation Reduction Act, a climate law lacking Republican support, while Trump has vowed to abolish the tax credits and subsidies associated with it, referring to them as a "green new scam."
The feasibility of Trump fulfilling these campaign promises remains uncertain, but a Harris victory is anticipated to favor renewable energy. First Solar, the largest solar panel manufacturer in the U.S., witnessed a 16% decrease in its stock value this month amid industry volatility and political uncertainty. A Harris-led administration could potentially benefit investors who capitalized on this downturn.
Electric vehicle manufacturers attempting to compete with Tesla might find a Harris administration advantageous, especially as Tesla CEO Elon Musk has openly supported Trump. Musk’s political engagement, including disputes with California officials, has provided opportunities for companies like Rivian to attract dissatisfied progressive customers. As Tesla increasingly focuses on autonomous driving, government subsidies and tax credits become vital for competitors like Rivian.
Offshore wind energy is another sector likely to benefit from a Harris win. Iberdrola, a Spanish energy giant, has invested over $13 billion in the U.S. and UK in the past year, resulting in a 150% profit increase during the first nine months. Its American subsidiary, Avangrid, is available at a modest price-to-earnings ratio slightly above 12, according to S&P Global metrics.
Moreover, less obvious beneficiaries include defense contractors like Honeywell. Their stock performance appears to correlate with Harris’s odds of victory, possibly reflecting confidence in her commitment to maintaining U.S. support for Ukraine against Russia.
A Harris victory could also alleviate concerns for major importers, as Trump’s proposals for a global tariff of at least 10% coupled with a 60% tax on Chinese goods could negatively impact large retailers such as Target.
Sectors to Sell:
Some remain skeptical of investing strategies based solely on election outcomes. Jay Hatfield, CEO of Infrastructure Capital Advisors, emphasizes the significance of overall tax policy, including corporate tax rates, on market performance.
Nevertheless, financials are a focal point in the “Trump trade” due to potential deregulation. Stocks like JPMorgan Chase and Goldman Sachs might see increased investor interest with a Trump victory, whereas a Harris win could lead to a sell-off.
Industries sensitive to climate policy should be closely monitored. While Harris is seen as beneficial for renewables, according to CFRA Research’s Chief Investment Strategist Sam Stovall, sectors such as offshore oil, coal, and foreign-built solar could face challenges. Oil driller Schlumberger and coal industry player Consol Energy might be stocks to avoid if Harris becomes President.
Despite a potentially more favorable stance towards Big Tech compared to Biden, companies within the gig economy could encounter risks under a Harris administration. A note from Bank of America suggests that investors might withdraw from companies like Uber if Harris is elected.
In related news, influential business leaders will gather at the Fortune Global Forum in New York City on November 11 and 12, featuring high-profile speakers and thought-provoking discussions.
