Biden/Trump: Which sectors could benefit?

With their opposing views, it could be either ‘more of the same’ or a sea change at the sector level, whereas we’d expect the central bank impact to be less radical.

BIDEN

If Biden is re-elected, I’d expect to see a continuation of his current policies. Infrastructure should do well, given Biden’s spending plans in this area. Ancillary sectors, such as construction and steel, should also benefit. US infrastructure is creaking and highways, airports and roads all need improvement.

Biden’s “Investing in America” agenda and the CHIPS & Science Act are both designed to stimulate domestic growth and bring key manufacturing sectors back to the US. We would expect this to benefit US tech and semiconductors.

Clean energy and electric vehicles are also key Biden policies, so we would expect the US to continue to focus on environmental policies, which could lead to some pressure on domestic oil and gas sectors.

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TRUMP

If Trump proves victorious, he will be focusing on his "Make America Great Again" (MAGA) philosophy – so targeting domestic growth and lower taxes. He is likely to be positively predisposed to real estate, given his personal involvement, but is unlikely to be able to continue the low-tax policies from his last stint as president, given the dire fiscal situation of the US.

Conversely, he is less supportive of clean energy and electric vehicles, so we’d expect to see the opposite effect of a Biden presidency. I suspect defence would do well under Trump, alongside domestic industries like steel, given the likelihood of further tariffs.?

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POLICY IMPACT

I would suspect that a Trump presidency would have more inflationary potential, given he has promised 10% tariffs across the board on imports. But this is unlikely to factor into the Federal Reserve’s (Fed) thinking for 2024, or even early 2025. I’d expect the Fed will have likely already begun the cutting cycle by then.

The fiscal environment and overall spending are unlikely to change in the near term under either candidate, but I'd expect Trump to be more assertive with US foreign policy and trade, despite recent actions by Biden regarding China tariffs on electric vehicles. I’d also expect China to continue to be a big focus.?

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