This year’s presidential elections have grabbed the nation’s collective attention as two of the worst-liked candidates of all-time slug it for the role of commander in chief.
While many analysts say a win for Donald Trump will upset markets and could cause shares to tank, Hillary Clinton coming out on top won’t be positive for everyone in corporate America.
The Democratic candidate’s policies could prove troublesome for U.S. firms and some of her rhetoric leading up to the big day has already caused major market movements. And the major targets of Clinton’s ire — pharmaceutical firms and financial institutions — may see large scale reforms should Clinton make it to the oval office.
While they may not wear support for Trump on their sleeves, these three behemoths could fall from grace should Hillary Clinton win the White House. Regulations and taxes that Clinton stands behind could weigh on these firms’ bottom lines.
Stocks That Will Suffer Under Hillary Clinton: Mylan (MYL)
Last month, Mylan NV (NASDAQ:MYL) was caught up in a wave of controversy when the company took some heat over the rising cost of its EpiPens.
In just under 10 years, the price of EpiPen rose from $100 to $600, causing many to question whether MYL was unethically price gouging. Clinton weighed in on the issue saying that there was “no justification” for the firm’s price hikes.
This is not the first time Hillary Clinton has fired at the biotech space. Last September, she promised to take on the industry’s unfair price increases and it has become a pillar of her campaign. This is bad news for all pharmaceuticals, MYL in particular, as it hasn’t quite shed its Scrooge-like image over the EpiPen scandal.
While Mylan did promise to increase the co-pay of its patient assistance program and also double the number of patients that are eligible, many say that’s not enough and Clinton is likely to agree.
Mylan’s EpiPen problems won’t fade from the public consciousness if Clinton takes office, as the company’s efforts to smooth things over have been called a PR stunt by others in her party and Clinton may make an example of the company to make good on her campaign promises.
Stocks That Will Suffer Under Hillary Clinton: Apple (AAPL)
Apple Inc. (NASDAQ:AAPL) CEO Tim Cook has publicly backed Hillary Clinton, but that doesn’t mean that her decisions in the oval office will be great news for the company. Like many other U.S. multi-nationals, Apple has found itself with a great deal of cash overseas — over $200 billion, to be exact.
AAPL has been reluctant to bring the money back into the U.S. due to the current 35% tax that would be imposed on the earnings, so the money has been sitting offshore while Cook waited to see whether the new administration would change the repatriation tax. Now that sum is the center of a debate with Brussels, however, over whether Apple has been paying the correct amount of tax in Ireland.
Because of that controversy, Cook is planning to bring the $215 billion back into the U.S. next year, whether the tax policy changes or not. If Hillary Clinton is in office, it’s likely that Cook will need to set aside a few billion to pay his tax bill, because her policies do very little to alleviate big businesses from their tax obligations. A Trump victory on the other hand may see that 35% tax lowered or even temporarily abandoned.
Stocks That Will Suffer Under Hillary Clinton: Exxon Mobil (XOM)
Hillary Clinton’s stance on climate change will weigh on energy stocks like Exxon Mobil Corporation (NYSE:XOM), because she has promised to promote renewable energy and impose strict regulations on the industry.
The oil and gas industry is already struggling with oversupply issues and ultra low prices and Clinton bearing down on the sector could exacerbate those woes.
Hillary Clinton’s commitment to further regulating the industry and cutting tax subsidies that oil and gas companies currently receive will likely compound their financial problems. She has promised to cut oil consumption by a third once she takes office, something that will add to XOM and its peers’ oversupply issues.
Stocks That Will Suffer Under Hillary Clinton: JPMorgan Chase (JPM)
Big banks are caught between a rock and a hard place this election cycle. On one hand, market volatility is expected should Trump take office, but on the other hand, they face tougher regulation and higher taxes if Hillary Clinton makes it to the White House.
Clinton has been outspoken about the need to impose tougher restrictions and tighter regulations on Wall Street, something that will make it more difficult for financial institutions like JPMorgan Chase & Co. (NYSE:JPM) to operate. However, perhaps the most worrying aspect of Clinton’s campaign promises for JPM is Clinton’s view on the Dodd-Frank Act, specifically the Volcker Rule.
Clinton has said she will expand and enforce the Dodd-Frank Act and that she will close loopholes in the Volcker Rule, which keeps banks from making investments using depositors’ money. JPM has been trading this way for years, but Clinton taking office may make trading on behalf of clients a thing of the past.
As of this writing, Laura Hoy was long AAPL stock.