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Josh Owens

Josh Owens

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Josh majored in International Relations at the University of Edinburgh and is currently the Content Director at Oilprice.com. Josh has over 6 years of writing…

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Trump And Biden: How The Stocks Divvy Up

Elections

Stocks are just as polarized as people these days. After all, the market is mostly run on sentiment, so it only stands to reason. 

Whether you're a Trump supporter or a Biden supporter, a die-hard Republican or no-questions-asked Democrat (because there’s no in-between anymore), stock picks tend to align with political “ideals”. 

And for those who are true market players, the game is on to identify those stocks that could end up being big winners or losers coming out of the November 3rd presidential elections, assuming the market emerges unscathed as a whole. 

Below are our Top 10 picks based on a Trump or Biden victory in November: 

The Trumpite’s Stock Portfolio

In the event of a Trump victory (a real one, not a “refuse-to-step-down version), the stocks that could end up gaining nicely are likely to be found in the energy and financial sectors from a de-regulatory point of view, as well as among those companies who have already raked in coin from the Trump administration’s corporate tax breaks. 

#1 Goldman Sachs (NYSE:GS)

Goldman could benefit with a Trump victory, as noted by Fox Business, because merger and acquisition activity could soar in a more lenient regulatory environment and hopes of economic improvement. 

#2 Bank of America (NYSE:BAC)

BofA is already looking fairly solid, but a Trump victory is expected to give it a further boost due to the administration’s more lax view of necessary regulations of the banking sector. "Wall Street veterans Larry Fink and Lloyd Blankfein, along with presumptive Democratic Presidential nominee Joe Biden, have suggested deficit-reducing increases in corporate tax rates," Kiplinger cited Keefe, Bruyette & Woods analysts as writing in a note to clients, noting that BofA would see its earnings per share reduced by about 9% under Biden’s proposed 28% corporate tax rates. 

#3 Exxonmobil (NYSE:XOM)

Despite a couple of unexpected bans on exploration coming from the Trump administration in recent weeks, the president is a big fan of fossil fuels, and Exxon is set to benefit far more from a Trump victory in November. 

"XOM is trading at prices first seen 20 years ago and sports a dividend yield of more than 8%," Money Morning Chief Investment Strategist Shah Gilani said. "Just as we saw with tobacco stocks, industries drifting toward measured declines – like fossil fuels – can make solid investments if bought at the right prices."

#4 Target (NYSE:TGT)

Target is one company that benefited from Trump’s corporate tax cuts and the Jobs Act, and JP Morgan lists it as a company that stands to possibly underperform under Biden, Reuters reports. 

#5 Lockheed Martin (NYSE:LMT)

While it’s true that the Trump administration has often lauded pulling American troops out of various conflict zones, on the other end of this spectrum is a lot of talk and a great deal of fanfare about things like “Space Force”, cybersecurity and missile defense, which has dollar signs pinging in the ears of Lockheed Martin, which Gilani describes as the aerospace “cream of the crop”.  

A Bidenesque Portfolio

#1 Tesla (NASDAQ:TSLA)

The EV giant that’s already taken this year by storm is the most obvious Biden portfolio choice, and a Democratic victory in the White House is likely to see this stock soar even more in proposed new tax incentives and government purchases, among other things, Reuters reports. 

#2 IBM (NYSE:IBM)

Trump’s trade war with China hasn’t been good for companies like IBM, which would fall victim to the administration’s threat to remove any companies from the running for federal government contracts if they’re outsourcing anything to China. IBM’s stocks should get a boost from a Biden victory, which would be expected to tone this war down a bit or at least add an element of certainty to it. 

#3 AECOM (NYSE:ACM)

This $6.65-billion market cap company could be a big beneficiary of a Biden win, as the Democratic candidate has laid out plans to spend a lot on construction and engineering, according to Citi analyst Andrew Kaplowitz, cited by Reuters.  

#4 Alibaba (NYSE:BABA)

This China-based tech and ecommerce giant is expected to get a fairly significant sense of reprieve with a Biden victory, which again could ease the trade war that has turned into an all-out Cold War. 

#5 Netflix (NYSE:NFLX)

Overall, a lineup of big tech companies may fare better under Biden. While Netflix isn’t one of those that’s been caught in the crossfire for allegedly suppressing Conservative views, it is expected to ride the tailwinds of better days for stock prices for this sector. 

Is there anything that’s not polarized? Well, sort of. According to Raymond James analyst Chris Meekins, the healthcare sector is a toss-up as Trump would boost pharmaceutical companies by going against the Affordable Care Act and Medicaid, while Biden would boost development of testing and vaccine capabilities and equipment. If Biden wins the presidency but the Republicans keep the Senate, Meekins sees the healthcare sector outperforming the market, as it historically has under those particular circumstances. 

By Josh Owens for Safehaven.com 

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