Equities week ahead forecast: US election stocks & sectors to watch

With just days to go until the November 5th presidential election, the official polls are still very tight although Kamala Harris appears to have tipped ahead this weekend. However, the markets have been following prediction markets such as Predict and Poly market, which points to a Trump victory, albeit narrowing odds of a Trump victory.

The S&P 500 eased back from its record high reached in October amid de-risking ahead of the election this week. Here we consider which sectors and stocks may perform well in a Trump versus Harris victory.

So, which stocks could rise should Trump return to power?

Trump's pledge to reduce corporation tax and ease regulation is expected to boost the markets in the case of a trump victory.

U.S. banks will likely benefit from a Republican swift thanks to improved domestic investment, looser regulation, and tax cuts. Equities stocks such as JP Morgan, Bank of America, and Wells Fargo could be in demand, particularly after encouraging Q3 results.

Meanwhile, M&A could also benefit from more lenient regulation enforcement, meaning that Goldman Sachs and Morgan Stanley could also benefit.

Automotive: The auto sector, which has a strong exposure to the domestic market, could perform well under Trump. This includes stocks such as Ford and General Motors. In the EV sector, Tesla could rise following solid support from Elon Musk for Trump's election campaign.

Crypto stocks Trump has shown himself to be the pro-crypto candidate across the campaign, helping to boost Bitcoin to within just a few $100.00 of its previous record high. As a result, crypto stocks have risen. Under a Trump presidency, crypto stocks could continue to move higher. MicroStrategy, but digital riot platforms could benefit.

Energy Trump supports fossil fuel industries, which could benefit oil and gas majors. He would likely pursue policies favoring domestic energy production, which could benefit companies such as Chevron and Exxon Mobil, which booked gains on Friday after upbeat results.

Trump-related stocks, such as Trump Media and Technology, in which Trump is a majority state shareholder, stand to gain if he wins further.

What could a Kamala Harris victory mean for sectors & stocks?

Kamal Harris’ plans to increase taxes on capital gains, stock buybacks, and corporate earnings could unnerve investors and increase corporate costs, which could result in some weakness. That said, a Harris victory with a Republican could result in a gridlock that could keep the bull market happy.

Homebuilders Harris has pledged to build more homes and reduce costs for renters and homebuyers through tax incentives and a lower interest rate environment. The administration could benefit stocks such as KB Home and Lennar.

Harris has focused on healthcare and pledged to cut costs in the sector by implementing caps on prescription drugs. This could hurt profit margins at pharma giants like Eli Lilly and Pfizer.

Green energy has been an area that Harris has also shown keen support for and is likely to offer increase incentives and supportive policies as well as regulation. While Trump has pledged to withdraw from the Paris Agreement Harris has said she aims to align with the agreement of reducing pollution by 2035

Infrastructure stocks could also benefit from a Kamala Harris victory as she has signaled a likely increase in federal infrastructure spending focusing on green energy transportation and broadband expansion. This could include stocks such as Nucor and Caterpillar.

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.