SECTORS TO WATCH IN THE ELECTION YEAR

May 7, 2024No Comments

 

 

Today we’re going to talk about potential stock sectors and their movements [00:00:30] coming into the US elections. Sectors to watch in the election year – it’s a spicy topic! We’re going to look at where certain sectors may land depending on the potential of either party winning. Now, all of this is really just speculation and conjecture because we don’t know who’s going to win and we don’t really know how these sectors will react. So, this is kind of theoretical, if [00:01:00] you will, but it’s a fun exercise and it’s certainly something that we should keep in mind as the US election results become more and more clear. And as you’re about to see on the PowerPoint that I am going to put up, the election polls and betting are pretty much neck and neck right now.

There was a clear win for the Republican side just a month ago, and now they’re closer to a dead heat while all the independents [00:01:30] are very, very, very distant losers. So, let’s share the screen and we’re going to look at the Trump versus Biden ‘Sectors to Watch in the Election Year’ as the election approaches, in November of this year. I’m recording this late April of ’24, and generally speaking – these are just thoughts that I put together from my own musings and analyst research. They are generalizations that you can’t take as absolutes. [00:02:00] 

So, Trump is thought to be a little bit more friendly towards the Healthcare companies. Less regulatory and less restricting, so that could be a positive thing for those companies. Generally speaking, he’s also a believer in [00:02:30] ‘laissez-faire capitalism’ – as am I – but more free market.

 

SECTORS TO WATCH IN THE ELECTION YEAR – The Tech Space

But there are exceptions to that, and certainly, this comes into the Tech space.  There are certain companies that are going to be less focused on US soil and some companies that are really sending more business overseas, that kind of thing. He’s pretty protectionist as a President as you may recall from the last time. There are [00:03:00] definitely going to be less energy restrictions. And I would even say though, that even under the very ‘pro-green’ Biden administration, the lack of reality behind some of the restrictions imposed by the ‘Green Movement’ are the problem. You’ve seen me cover this on past videos and past [00:03:30] blogs – our need for electrical power over the next five or six years is going to literally grow by 500%. And that’s not going to happen with the pace that we’re doing with green energy. [00:03:45]

So, there’s going to have to be intervention, probably a ‘re-opening of some of the taps’, so to speak on oil/gas production. But either way, in the longer run, Trump is going to [00:04:00] be a little bit less restrictive on the traditional energy sources. Then, when it comes to the loaning facilities, some of the (very expensive) research reports we’ve purchased as Portfolio Managers, were speculating on the possibility of the privatization of Fannie Mae and Freddie Mac. You may be familiar with these two federally-backed mortgage corporations. So, there’s possibility of privatization of those firms under Trump.  

 

MORE SECTORS TO WATCH IN THE ELECTION YEAR

The last thing is the Military. Now often people think Trump is very positive towards the Military, but [00:05:00] really, it’s kind of a toss-up because he may pull support away from the Ukraine movement, but then he may up the onshore defense side for the US itself. That may be the opposite for Biden.

Those are some of the sectors to watch in the election year that I’ve been looking at, but with Biden, we are going to get more healthcare regulation, and that is certainly something to be concerned about if you’re buying into that sector. More tech regulation, [00:05:30] definitely more traditional carbon-based energy restrictions – until reality hits I guess – which has been my position for a while. We need to bridge the gap. But nevertheless, longer-term you’ll see that. Definitely an electric vehicle (EV) focus, and a Solar focus for homes and other industrial applications. Rare Earth, which is the mineral required to build a lot of these batteries. [00:06:00]. And as I said, the Military side is kind of a toss-up between home defense and helping countries offshore. 

So, this is not a poll, this is a betting average.  You can bet on anything these days, it’s really amazing. This RCP betting average is on who’s going to win. You can see it’s basically a dead heat. [00:06:23] The red is Trump, meaning Republican, and the blue is a Biden or Democrat [00:06:31]. And you can see that the overall trends have been more positive for the Republicans. But what you’re seeing is a fairly recent strong move on the betting side – not in the polls – towards Biden. And they’ve literally come together. You can see here at the top, Biden at 42.5, and Trump at 42, it’s effectively the same. So, it is kind of a dead heat right now from the betting perspective. So, I’m going to [00:07:00] get you to take a look at now a bunch of charts. We’re going to rip through these because really, we’re speculating on what’s going to happen as we approach, hit, and pass November.

RCP Betting Average

[00:07:11] So, a lot of these charts can change depending on who gets elected. But this is the recent breakout. I have talked about this on a recent video and on blogs that the Healthcare sector ETF (XLV in the US), broke out. It’s pulling back to the neckline. I like the look [00:07:30] of that. A lot could change though, depending on who gets elected, but I just thought I’d pull this chart up. It’s a relatively bullish chart. Okay, Trump is bullish as well with certain tech stocks. So Intel does a lot of work on American soil, and so that’s considered a more pro-American approach to buying into some of the chips and the technology side versus [00:08:00] other companies. Another company, believe it or not, is Taiwan Semiconductor, and is the reason why there were some diplomats that went over to Taiwan recently, and there is concern over China’s grumbling about Taiwan because Taiwan actually is bringing a lot of the business side to the US.

XLV Health Care Select Sector

Plants and Technology – Sectors to Watch in the Election Year

They’re investing in the US in plants and technology. So, Taiwan Semiconductor is actually a pro-US [00:08:30] stock. Trump is bullish on any company, whether they’re US or international that wants to bring business to US soil. So on the other side, Trump is very much against left-biased technology firms and social media firms, and probably the king of them all is Facebook/Meta. And he’s also against exporting business to the US and that’s certainly what Nvidia has been [00:09:00] doing. So that could really hurt Nvidia if Trump is elected. There are certain firms that would benefit and certain firms that would not. It’s not absolute to say whether tech will benefit or not with either President. Trump is definitely bullish on Oil & Gas. And I think no matter what, reality is going to hit even the most extremist left-wing individuals [00:09:30] or ‘Green Movement’ politicians because there is a gap that needs to be filled.

Trump Bullish Tech Investing USBut if we’re looking at the way the market might take it – which the market thinks short-term all the time – it’s fairly myopic. It would be more bullish for Oil and Gas if Trump got elected. You know my thoughts on both of these, but I’m kind of interested in Natural Gas right now, actually, you can see on the chart just as [00:10:00] I speak, it’s done a little gap out of a bit of consolidation. So, I think the case is growing there for a clean alternative to bridging that gap. But anyway, that was another video I did. You can look into that. Party-neutral is Military, again, Ukraine versus Homeland. So, these are some of the larger Military-orientated firms out there, and there’s really not a lot of, as you can have by guessing who’s going to win.

Trump Bullish: Oil and Gas

Electric Vehicles – Sectors to Watch in the Election Year

[00:10:30] Biden, as we mentioned, is bullish on the electric vehicle movement. So that’s obviously okay for Tesla. And these are all concepts based on company neutrality. In other words, you know, Tesla can do a good job or bad job from an earnings perspective, and that changes everything. But just as a generalization, Tesla would benefit if Biden gets in. Interestingly, Elon Musk is actually kind of a converted Democrat over to being more of a Republican, as he’s also a big [00:11:00] believer in free speech and ‘laissez-faire capitalism’, whatever the case. So, there’s also this, ChargePoint, and they’ve been in the hole because EVs generally have not been received well throughout North America and even in Europe. They’re really not what everybody says they are. But that technology could change. And so ChargePoint could increase earnings as people [00:11:30] start to accept maybe a better-built EV in the future and one that could withstand winters, for example. And that means that these guys with charging port technology would benefit. Biden’s also in favor of Solar Power. A couple of solar power companies are First Solar and Interphases. So, both of these are in that area, and that should be bullish for Solar – [00:12:00] but hasn’t been so far.

Party Neutral US Military

There is also the Rare Earth sector, and I think this actually isn’t a bad play because no matter what, the Green Energy movement will come, even if it doesn’t come in the next five years. And that’s always been my argument. I think everything’s going to be more environmentally friendly, but we can’t do it as quickly as everybody thinks. So in the long run, the Platinum, Palladium, these are some companies that are involved or the [00:12:30] chart itself for Platinum on the left. You know, these are companies to keep in mind. And of course you can even just buy an ETF for Rare Earth Minerals. It kind of bunches them all into one group. Notice I didn’t put Uranium in there – it’s not “Rare Earth” – but it is definitely going to be something that is going to be a bridge again and a long-term green energy power. 

Biden Bullish: EV

So, I am long-term bullish Uranium, [00:13:00] but I’ve talked about that too much in my blogs and videos, so I decided not to talk about that today. So, there are some ideas for you, that I hope help. This video is really just food for thought versus actionable ideas because we don’t know how the election is going to turn out. We don’t know if these sectors will react in the way I’m thinking about them. It really is just conjecture at this point. So, I hope this overview of sectors to watch in the election year is of some interest to you [00:13:30] as food for thought, and we’ll see you next week. Thanks for watching.

Biden Bullish: Rare Earth

 

Never miss another video!

Get Smart Money Dumb Money videos delivered directly to your inbox.

Recent Posts

Screenshot 2024-06-18 060339

If things are so great for the market, then how come…

Screenshot 2024-06-14 181357

Canadian Western Bank Stocks

snapshot

An Interview with Larry McDonald of BearTraps

Screenshot 2024-05-30 035716

Opportunity in Bonds – Canadian bonds and more

Screenshot 2024-05-24 081148

Emerging Markets ETFs – Time to Buy

Screenshot 2024-05-17 140637

Don’t Invest Like This

Keith's on Demand Technical Analysis course is now available

Scroll to Top