America’s presidential race has generated reams of predictions about how US stockmarket sectors are likely to respond to a particular candidate’s victory. As Fidelity’s Tom Stevenson points out in The Sunday Telegraph, there are plenty of proposals on both sides that are highly unlikely to see the light of day, so it makes sense to focus on areas where the candidates broadly agree, and where Congress is not expected to stymie change.
Both Clinton and Trump are aiming to boost spending on defence and infrastructure, so construction, engineering and defence firms should have the wind at their backs. Both want to combat tax avoidance through holding funds offshore, so beware of firms with low effective tax rates.
Both look relatively protectionist compared with the current regime, so companies orientated towards the domestic economy could get a boost. Clinton and Trump both plan to raise the minimum wage, so the higher burden on large employers with low-wage workforces could undermine these companies’ stock prices, says Stevenson.
A Clinton victory would imply a government campaign against price rises by pharmaceutical companies, which she has criticised, adds CBSNews.com’s Anthony Mirhaydari. A Trump victory would be excellent news for gold and gold miners, given that he represents “significant and perhaps unprecedented” policy uncertainty, according to Citigroup.