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Biden Town Hall: 4 Key Investing Takeaways

Former Vice President Joe Biden may not have faced off with President Donald Trump on the debate stage, but he still got in some fighting words. In lieu of a second presidential debate last night, the duo faced off in dueling town hall events. From Philadelphia and Miami, they answered voter questions, made some partisan jabs and clarified their stances. With just weeks to go until Election Day, here are the top takeaways from the Biden town hall event.

Former Vice President Joe Biden speaking to a crowd in Philadelphia in May 2019.

Source: Matt Smith Photographer/Shutterstock.com

Before we dive into the specifics, you may be wondering why this event even mattered? Well, consider the first presidential debate. Many investors — and the rest of the general public — walked away confused about everything from election interference to taxes. Simply put, a night of shouting and interruptions kept viewers from learning anything new about either candidate. Leading up to the second debate, the Commission on Presidential Debates promised new rules, a new format and a tougher moderator. Then, Trump got the novel coronavirus.

Clearly, Americans had a lot on their mind going into the Biden town hall event. They wanted clarification from the earlier debate, and they had new questions since Trump fell ill.

Most importantly, with Biden pulling further ahead in polls, Wall Street needs to take notice. Live from the National Constitution Center in Philadelphia, Biden joined former White House Communications Director George Stephanopoulos and a handful of voters to give investors exactly that chance. If you missed the Biden town hall, InvestorPlace has your back.

Here are the top four things you need to know to profit from a Democratic White House.

Takeaway No. 1: Reopening With Restrictions

Approaching Election Day, Trump continues to promise a so-called October surprise. Not familiar with that jargon? Essentially, Trump has told voters that he will ensure early approval for a novel coronavirus vaccine candidate, facilitating mass vaccination before it is time for Americans to head to the ballot box. However, trial delays from AstraZeneca (NYSE:AZN), Johnson & Johnson (NYSE:JNJ) and antibody drug maker Eli Lilly (NYSE:LLY) could make those promises impossible to fulfill.

With that in mind, what Biden thinks about a coronavirus vaccine, and the path forward, matter a lot. Should investors start to sell their vaccine portfolios? Should you focus on stay-at-home stocks like Zoom Video Communications (NASDAQ:ZM) or reopening plays like Carnival (NYSE:CCL)?

If you ask Trump, a Biden victory would mean an instant return to lockdowns and economic pain. Free of debate interruptions, the former vice president tells it a little differently.

He said that he is on board with a continued reopening — as long as businesses and schools take effective measures such as enforcing face masks and social distancing. In other words, he said he plans to balance the input from economists and scientists. For investors, this means they could profit from a best-of-both-worlds scenario.

Moving forward, stick with the safest of vaccine stocks. Although pauses in clinical trials are a normal part of the scientific process, names like Moderna (NASDAQ:MRNA) and Pfizer (NYSE:PFE) may feel less controversial right now. At the same time, strike a balance between stay-at-home and reopening plays, just like how Biden will balance his advisory input. Stick with leaders like Zoom, and be strategic about the reopening risks you undertake.

A suggestion? Avoid the likes of AMC Entertainment (NYSE:AMC) and pursue leading airline operators like Delta Air Lines (NYSE:DAL).

Takeaway No. 2: Buy Electric Car Stocks for Higher Taxes

Biden also went more in depth into his proposed tax plans. According to the former vice president, he only wants to reverse elements of the 2017 Tax Cuts and Jobs Act that benefit the elite in the United States.

To do this, he wants to reverse the income tax on Americans who make more than $400,000 to a 39.6% rate. This, he says, would raise $92 billion. At the same time, he will raise the corporate tax rate from 21% to 28%. Doing so would raise $1.3 trillion.

While there are many potential investing takeaways from changes to the TCJA, one stands out. Biden said that money raised from increased taxes will directly benefit U.S. infrastructure.

Beyond building more bridges and roads, which would benefit traditional infrastructure stocks like Caterpillar (NYSE:CAT), Biden said he plans to boost green infrastructure. Through his plan to invest $2 trillion in clean energy, he said his administration would install 500,000 charging stations across American highways. In addition, he said he wanted to make the U.S. a leader in the electric vehicle space.

What should investors make of this? As Biden referenced during the town hall event, Moody’s (NYSE:MCO) favors his plan. The debt ratings agency says that his economic proposal would create 7 million more jobs than the proposal from Trump. Biden would lift average after-tax income by $4,800 and lower the unemployment rate below 4%. According to the agency, that would beat the recovery under Trump by 1.5 years.

With that expert backing, count electric car stocks as some of the biggest winners under Biden. Leading names in the EV space like Tesla (NASDAQ:TSLA), Workhorse (NASDAQ:WKHS) and Fisker (NYSE:SPAQ) stand out. Additionally, look to EV-related plays like QuantumScape (NYSE:KCAC), Blink Charging (NASDAQ:BLNK) and Switchback Energy Acquisition (NYSE:SBE), the special purpose acquisition company behind ChargePoint.

Takeaway No. 3: Invest in Racial Justice

In pre-election discussions, Biden has sought to walk a more moderate line in conversations surrounding racial justice. For example, he has avoided supporting calls to defund or abolish the police. Instead, he has said that there are “bad apples” in the police force. This narrative broadly calls for more training and funding for police.

Tonight, Biden almost exclusively focused his stance on the wealth of Black Americans.

He called for new initiatives to fund historically Black colleges and universities, startup capital for Black entrepreneurs and other policies that would create more equitable outcomes in the business world.

As the former vice president plans to increase the wealth of Black households, investors should consider how to invest in racial justice. According to The Motley Fool, some of the top picks include Nike (NYSE:NKE), Starbucks (NASDAQ:SBUX) and UnitedHealth (NYSE:UNH). Moving forward, companies that address critical social issues — and do more than just lip service — will earn investor trust. Consider this along with the rise of environmental, social and governance (ESG) investing.

Takeaway No. 4: ‘I Do Not Propose Banning Fracking’

During the Biden town hall event, the former vice president also walked a moderate line on fracking. More progressive voters want to eliminate fracking, highlighting its environmental impacts and controversial pipeline projects like Dakota Access.

But instead of banning it outright, his plan involves prohibiting it on federal lands. He will also focus on achieving net-zero emissions of carbon during the creation of energy by 2035. While this could lead some traditional oil and gas stocks such as Devon Energy (NYSE:DVX) to profit, there is a safer way to invest.

So why exactly is Biden willing to disappoint progressive voters? During the town hall, it seems as if his hands are tied by technological realities. He identified that one of the key challenges in making renewable energy more mainstream is making its use cheaper and more accessible. For instance, he highlighted difficulties in relying on solar power in regions of the U.S. that receive less direct sunlight.

New technology is quickly eliminating those problems. That is why investors should start thinking about hydrogen and solar stocks — even in advance of this mainstream adoption.

For hydrogen, Wall Street darlings Plug Power (NASDAQ:PLUG) and FuelCell Energy (NASDAQ:FCEL) will likely continue to be hot. In addition, as we outlined earlier, an upcoming SPAC IPO from Advent Technologies — via AMCI Acquisition (NASDAQ:AMCI) — also looks promising. In the solar space, there is a similar setup. Existing stocks like First Solar (NASDAQ:FSLR), SunPower (NASDAQ:SPWR), Sunrun (NASDAQ:RUN) and Canadian Solar (NASDAQ:CSIQ) all will benefit.

There is also a new market entrant to consider. Remember how Biden focused on technological challenges? Well, Array Technologies (NASDAQ:ARRY) just came public. The company provides solar tracking systems, a way for solar panels to pivot toward the sun throughout the day. Simply put, it increases energy production, making the payoff for switching to solar greater. Make sure to keep this newly public company on your radar if Biden wins.

The Bottom Line

While there is still so much uncertainty surrounding the presidential election, the Biden town hall gave the Democratic nominee a chance to answer key voter questions. For Wall Street, this should be a huge catalyst for solar, hydrogen and EV plays.

What comes next? Wrapping up the town hall, Biden said he is committed to a third presidential debate. Look for that next Thursday, Oct. 22. Interesting investing takeaways from that event could include further exploration of healthcare, as well as the confirmation hearings of Judge Amy Coney Barrett.

For now, the polls say you should be investing for a greener world.

On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article. 

Sarah Smith is a Web Content Producer for InvestorPlace.com. 

Article printed from InvestorPlace Media, https://investorplace.com/2020/10/biden-town-hall-4-key-investing-takeaways/.

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