The US presidential election is just around the corner and the whole world eagerly awaits who’d be the next White House resident. The financial markets are also fearfully waiting for who will emerge the next president. A proof of this the fact that the S&P 500 have been retreating, albeit slowly, since reaching an all-time high. Over the past three months, it’s lost 1.36%.
It’s understandable because, regardless of who becomes the next POTUS, businesses will be affected either positively or negatively. For instance, Hillary Clinton has spoken about how she will crackdown on drug makers. She has particularly called out Valeant Pharmaceuticals (NYSE: VRX).
In essence, if Hillary Clinton becomes the next US president, drug makers could potentially see a shrink in their margins. That’s contributed to why the Dow Jones US Biotechnology Index is down 16% year-to-date.
While drug makers are potentially going to have a rough go of things under Hillary Clinton, some sector will benefit immensely.
Hillary Clinton once said, “Climate change is real – no matter what climate deniers say. I’ve laid out bold national goals to address the threats it poses. As president, I’ll say no to drilling in the Arctic. I’ll stop the tax giveaways to big oil and gas companies. And I’ll make significant investments in clean energy. Our children’s health and future depend on it.”
This needs no further explanation, clean energy business is likely to thrive under the presidency of Hillary Clinton. Therefore, investors would be smart to watch the electric vehicle, renewable energies and alternative fuel industries. If the clean energy thrives, auxiliary businesses tied to the sector should thrive as well.
Defense and Sector
It’s hard to find Hillary Clinton and Donald Trump agree on an issue, but they both agree that US needs a stronger defense and security.
Hillary Clinton said she will “provide budgetary certainty to facilitate reforms and enable long-term planning” as the president of the United States.
The translation of this is that they a Hillary Clinton administration would bring an end to the ongoing budget sequestration in the defense and security sector. This bodes well for defense stocks, like Lockheed Martin (LMT), being the government’s biggest contactor.
It’s not just the traditional defense and security companies like Lockheed Martin that will benefit under a Hillary Clinton Administration. The cybersecurity industry will also thrive if Clinton becomes the next POTUS. You’ve probably heard of the Distributed Denial-of-Service (DDoS) attack on the internet in the penultimate week of October. There have been a number of other attacks before that. And as the internet gets bigger, cyberattacks that are more sophisticated are inevitable. Public companies like Cisco (NASDAQ: CSCO) and Minecast (NASDAQ: MIME) are involved in the cybersecurity business.
Construction and Construction Equipment Sector
A report released by the society of professional engineers a few months ago found that US would fall short on what should be spent on infrastructure over the next decade by $1.44 trillion. The translation of this is that the US government needs to ramp up spending on infrastructure sooner rather than later. That’s because without such spending, economic growth will be inherently limited.
Hillary Clinton says she will make the biggest investment in infrastructure that America has seen in decades. In fact, she plans to establish an infrastructure ban that will be tasked with brining in money from the private sector to help speed up the improvement of US infrastructure.
To this end, investors should put stocks of construction equipment manufacturers on their watch list. Stocks of constructions companies, Aecom (NYSE: ACM), should also be on investor watch list of stocks that are likely to perform under Hillary Clinton.
Financial Sector
This is quite the odd one out on this list considering that Hillary Clinton has publicly said she intends to block loopholes in the banking sector in addition to taking measures to defend Dodd-Frank. Her plan would make lending business more transparent as well, providing opportunity for folks to get loans with bad credit. She has stood for something similar as a New York senator. This will only put more pressure on financial institutions and their stocks.
However, things will be more stable in the financial sector under Clinton, given her experience holding governmental position. Hillary would make the decisions that will stabilize the economy. Donald Trump’s volatile nature means that uncertainties will lurk in the financial sector. The truth is, when it comes to finances, investors don’t want uncertainties. This gives Clinton an edge over Trump – even though she could tighten things up within the sector.
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