With the 2024 U.S. election approaching, investors are paying close attention to how a Trump or Harris presidency could impact market sectors and the broader economy. View the full 2024 Pre-U.S. Election Outlook webinar replay for a detailed analysis of what lies ahead. Below is our breakdown of how each candidate’s policies might influence key sectors and investment strategies.

Scenario 1: Trump Win

Market and Sector Impact:

• Cyclical Sector Leadership: Energy, Financials, and Materials may outperform, similar to what was seen post-2016.
• Small-Cap Pop: Small-cap stocks could see a short-term boost due to expected regulatory cuts, though structural challenges remain.

Trade and Tariffs:

• Broad Tariffs: Likely to impose more tariffs, particularly on China, which could create inflationary pressures.
• Domestic Production Focus: U.S.-centric companies may benefit from tax breaks, boosting sectors with heavy capital expenditure.

Tax Policy:

• Corporate Tax Reductions: Potential cuts could favor companies producing domestically, benefiting utilities and real estate.

Energy Policy:

• Traditional Energy Expansion: Expect reduced regulation on oil and gas, favoring traditional energy stocks.
• Reduced Green Energy Subsidies: Renewable energy may see less support, but strong macro factors could offset policy pressures.

Tech & Antitrust:

• Lighter Regulation: Less emphasis on tech regulation, with possible easing of mergers and acquisitions in big tech.
  

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Scenario 2: Harris Win

Market and Sector Impact:

• Growth Sector Leadership: Technology and Communication Services likely to benefit from a Harris win.
• Clean Energy Boom: Supportive policies for renewable energy could drive long-term gains in green energy.

Tax Policy:

• Corporate Tax Increases: Harris has proposed raising corporate taxes, which could impact corporate earnings, especially in capital-heavy sectors.
• Capital Gains Tax Hikes: Could create market headwinds, affecting liquidity and higher-income investors.

Energy Policy:

• Green Energy Support: Strong backing for renewable energy, with subsidies and investment in clean technology.
• Reduced Fossil Fuel Focus: Regulatory pressure on traditional energy companies, though production levels may remain stable.

Trade Policies:

• Strategic Tariffs: More international collaboration on trade compared to unilateral actions, with a continued focus on China.

Tech & AI Regulation:

• Increased AI Oversight: Harris may pursue ethical and safety regulations on AI, slowing growth but benefiting large tech players who can navigate the rules.

Finally, irrespective of who wins, we think that neither candidate is particularly focused on deficit reduction, and persistent fiscal stimulus could sustain some market support regardless of election outcomes. Understanding the potential market impacts of a Trump or Harris presidency can help your team make informed decisions as the election approaches. If you enjoyed the webinar and would like to request the slide deck, email us by clicking the button below.

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About Ned Davis Research
Ned Davis Research (NDR) is a global provider of independent investment research, solutions and tools. Founded in 1980, NDR helps clients around the world make objective investment decisions. Our experienced strategists and analysts use fundamental and technical research with models, charts, indicators and weight-of-the-evidence methodology to help clients see the signals and invest with confidence. NDR is headquartered in Sarasota, Florida, with offices in New York and London.