Weekly Stock Spotlight: Amazon and Dell Shine While SMCI Struggles, Election Trades in Focus

US Elections Trade: Stocks on Watch

Single stocks with high sensitivity to U.S. elections tend to be those in industries or with business models that are heavily impacted by government policy shifts, including regulation, spending, and foreign policy. Here are some individual stocks to watch:

1. Tech Giants

• Meta (META), Alphabet (GOOGL), Apple (AAPL), Amazon (AMZN), Tesla (TSLA): Big Tech stocks are sensitive to elections because regulatory scrutiny often varies based on the administration. A Democratic administration may push for stricter regulation around data privacy, monopolistic practices, and content moderation, potentially affecting profitability. Conversely, a Republican administration may take a more hands-off approach, favoring business expansion.

2. Defense Contractors

• Lockheed Martin (LMT), Raytheon Technologies (RTX): Defense companies generally benefit from increased military spending, which is typically favored under Republican administrations. Defense budgets are often tied to foreign policy, with certain administrations more likely to approve increased defense budgets for global military presence.

3. Healthcare Providers and Pharma

• UnitedHealth Group (UNH), Pfizer (PFE), Merck (MRK): Healthcare stocks, especially insurers and pharmaceutical companies, are particularly sensitive to elections. Democratic administrations tend to advocate for healthcare reforms that can pressure insurance margins (like drug price negotiation and expanding Medicare coverage). Pharma stocks may react to drug pricing reforms and Medicare-related policies.

4. Renewable Energy

• NextEra Energy (NEE), First Solar (FSLR) , Enphase Energy (ENPH): Companies in renewable energy and clean tech are typically sensitive to Democratic victories, which usually entail incentives for clean energy and climate initiatives. This can lead to increased investments and subsidies for solar, wind, and EV infrastructure, benefiting companies in these sectors.

5. Traditional Energy (Oil & Gas)

• Exxon Mobil (XOM), Chevron (CVX), ConocoPhillips (COP): Oil and gas giants respond to election outcomes, as Republicans tend to favor policies that support fossil fuel production (reduced regulations, drilling incentives). Conversely, Democrats may impose restrictions or focus on renewables, impacting the profitability of traditional energy companies.

6. Infrastructure and Construction

• Caterpillar (CAT), United Rentals (URI): Infrastructure and heavy machinery stocks are sensitive to election-driven infrastructure policies. If the winning candidate prioritizes infrastructure spending, as has been a bipartisan trend in recent years, stocks like Caterpillar and United Rentals may see a boost from increased demand for construction equipment.

7. Financials

• JPMorgan Chase (JPM), Goldman Sachs (GS), Bank of America (BAC): Large financial institutions are sensitive to regulatory and tax changes stemming from elections. Republicans tend to favor deregulation, which is positive for banks, while Democrats may advocate for stricter oversight, higher taxes, or financial transaction taxes, which could weigh on profitability.

8. Agricultural Stocks

• Deere & Company (DE), Archer Daniels Midland (ADM): Agriculture companies are sensitive to U.S. trade policies and agricultural subsidies, both of which vary by administration. Tariff policies, especially regarding China, can affect demand and profitability, while subsidies for farmers may impact the agricultural equipment market.

9. Consumer Staples

• Walmart (WMT), Procter & Gamble (PG): Consumer staples may react to policies impacting the broader economy, such as tax reforms or fiscal spending that affects consumer purchasing power. These stocks are often seen as safe havens and could be in focus especially if the election results are contested.

10. China Stocks

• Alibaba (BABA), Tencent (TCEHY), JD.com (JD): Chinese stocks are sensitive to U.S. election outcomes due to trade policies and regulations impacting their operations. Changes in U.S.-China relations can significantly affect their performance.