Stocks and markets to watch if Kamala Harris wins the US presidential election
Kamala Harris is now the Democratic nominee for the US election – what sectors will be affected if she wins in November?
Kamala Harris is now the Democratic Party’s nominee for the 2024 US presidential election, after President Joe Biden stepped aside last month. Here's what investors should consider:
Potential market reactions
If Harris wins the election, markets may initially react with caution due to potential increases in corporate taxes and more stringent regulations. However, some analysts suggest that markets might welcome the stability provided by a more predictable president compared to Donald Trump.
Sectors that could benefit
Green energy and technology
A Harris administration could enhance prospects for clean energy and technology sectors. Investors might see gains in renewable energy companies, as Democrats typically prioritise green energy initiatives. Companies specialising in solar, wind, and other sustainable energy sources could yield considerable returns.
Healthcare
The healthcare sector might see a boost under a Harris presidency. Democrats often focus on healthcare reforms, which could create opportunities for companies in this space.
Infrastructure
Harris might continue the Biden administration's focus on infrastructure spending. Companies involved in construction, engineering, and materials could see increased demand if federal infrastructure projects are prioritised.
Sectors that could be under pressure
Traditional energy
Oil and gas companies might face headwinds under a Harris administration, as Democrats typically favour reducing fossil fuel usage and increasing regulations on these industries.
Financial sector
Banks and other financial institutions could face increased regulatory scrutiny under a Democratic administration, potentially impacting their profitability.
Factors to consider
Diversification
Maintaining a well-diversified portfolio remains crucial, regardless of who wins the election. This approach can help mitigate risks associated with market volatility.
Focus on fundamentals
Investors should prioritise companies with strong fundamentals that are likely to perform well regardless of political changes. Generally, this means investors should focus on factors such as interest rate policy, S&P 500 earnings growth, and the labour market rather than political headlines.
Long-term perspective
Most investors have investment horizons that extend beyond a single presidential term. It's important to focus on long-term goals and avoid making drastic changes based on short-term political events.
Student loan considerations
If Harris wins, there may be potential for student loan relief or forgiveness. Investors with student loan debt might consider holding off on refinancing or aggressively paying down federal student loans until the new administration's policies become clear.
Potential market volatility
While a Harris presidency might introduce short-term volatility due to uncertainties around new policies and regulations, it's important to note that election-related volatility is often short-lived. Markets typically price in election outcomes relatively quickly once the results are known.
This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. 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. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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