Stocks to watch as Biden, Trump vie for presidency
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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 havecracked 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 imposetariffs 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 includingApplied 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
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