Trump vs. Biden, Impact Of 2024 Presidential Election Results On Stock Markets

 

 

 

Trump, Biden [Source: new1]

 

As former President Donald Trump nears the Republican nomination, the possibility of a rematch between Biden and Trump is the biggest concern for investors.

 

The stock market's strong performance in the year before the election will continue in the year following, history tells investors. According to an analysis by Carson Group's Ryan Detrick, the S&P 500 closed higher in the election year in all cases where the S&P 500 was up more than 20% in the year before the election.

 

And historically, regardless of which party occupies the White House, stock prices have been shown to rise in election years, but Goldman Sachs' analysis shows that the worst performing sectors in election years tend to be the technology sector, while utilities and essential consumer goods sectors do well.

 

 

 

 

As former President Donald Trump nears the Republican nomination, the possibility of a rematch between Biden and Trump is the biggest concern for investors.

 

The stock market's strong performance in the year before the election will continue in the year following, history tells investors. According to an analysis by Carson Group's Ryan Detrick, the S&P 500 closed higher in the election year in all cases where the S&P 500 was up more than 20% in the year before the election.

 

And historically, regardless of which party occupies the White House, stock prices have been shown to rise in election years, but Goldman Sachs' analysis shows that the worst performing sectors in election years tend to be the technology sector, while utilities and essential consumer goods sectors do well.

 

S&P PERFORMANCE BY PRESIDENT

 

 

In the short term, President Biden's 1) push for green energy, 2) regulations on fossil fuels, and 3) his escalating technology war with China are top issues for investors.

 

In Trump's case, along with his full-time trade agenda, the pledge to increase crude oil production (drill baby, drill) has different implications for the stock portfolio.

 

 

 

Record earnings for big oil companies

 

 

 

By November, the priority for both sides is likely to be energy policy.

 

Critics of Biden's push for renewable energy argue that "even though he waged a war on fossil fuels, this sector has performed pretty well under the current administration." ExxonMobil (XOM) and Chevron (CVX) reported record profits, and U.S. crude oil production was at record levels.

 

But Trump's campaign promise to ease regulations on energy production and abolish current renewable energy subsidies will be another boon for the crude oil industry, according to Keith Bliss, global market and strategy director at BlockScross.

 

Large crude oil companies will be able to export as much to new markets as possible. Combining cost savings, access to new markets, reduced regulatory costs, and increased supply inventory production capacity, large crude oil companies will make even more money.

 

On the other hand, if President Biden is re-elected, big oil companies will struggle, and the administration will likely become more aggressive.

 

 

The American flag

 

 

 

Regulations on China

 

No matter who wins, some industries will face an uphill battle.

 

Trump and Biden's aggressive attitude toward China is likely to haunt investors and businesses' decision-makers.

 

I think we'll see a lot of aggressive moves on the Chinese front. - SHEZAD KAZI, China Beige Book

 

President Trump's decision to target China with tariffs of up to 25% during his first term kept investors on edge, and President Biden's plan to regulate China's technological advances has put a crossfire on the chip giants.

 

Neither candidate is good news for semiconductor companies like Nvidia, but warns Trump could pose a bigger risk.

 

President Biden wasn't friendly with China, but it's only going to get worse when Trump becomes president. If you look at Trump, he's a smart guy and he could just cut off the tap. And I'll tell Nvidia they can't sell anything.

 

A total ban could be a huge blow to the U.S. semiconductor giants. Artificial intelligence leaders like Nvidia and AMD make at least 20% of their sales from China, with China accounting for about a third of the sector's global sales in 2023.

 

Companies that rely on China for sales or supply chains will have to adapt - Limanson

 

Regulations on China

 

 

 

Automakers Struggling With Electric Vehicle Costs

 

Since Biden took office, EV sales have more than quadrupled, as automakers have joined the administration's ambitious goal of selling electric vehicles (EVs). But this transition is proving costly for existing automakers.

 

Ford reported a $1.3 billion loss in the EV sector in the latest quarter, and General Motors is also losing money in the sector.

 

They haven't figured out the EV market yet, and if Biden wins a second term, the administration will keep pushing the EV story. Then the big three will have no choice but to keep struggling.

 

Economic feasibility is becoming a problem as the price tag of EVs has risen sharply due to rising manufacturing costs. "To succeed, we have to lower the cost," Ford CEO Jim Farley said earlier this month.

 

We're seeing mainstream customers interested in EVs, but they're not sure, and they won't pay a high premium. So what that means (to manufacturers) is the cost, and we have to dramatically reduce the cost.

 

Trump, Biden

 

 

 

 

 

 

Trump Targets ESG

 

Investment taking into account environmental, social and governance (ESG) factors has become a top target for Republicans ahead of the 2024 election.

 

Trump has spoken out against ESG initiatives in the past, promising to support "the law to keep politics away from Americans' retirement accounts forever."

 

In his final months in office, he pushed for measures to keep employers from considering ESG issues in their retirement pensions, which was later reversed by Biden.

 

More skepticism and scrutiny from politicians and regulators about sustainable funds have poured cold water on the money flow. Investors had their worst year on record in 2023, taking a total of $13 billion out of U.S. sustainable funds, according to data from Morningstar.

 

 

 

Biden leading Trump in new general election matchup polling

Biden leading Trump in new general election matchup polling

 

 

 

The manner of the United States presidential election. (U.S. presidential election 2024, Biden and Trump)

The manner of the United States presidential election. (U.S. presidential election 2024, Biden and Trump)