A new poll from The Wall Street Journal indicates a close presidential race between Vice President Kamala Harris and former President Donald Trump, with Harris gaining notable support from nonwhite voters and a surge in enthusiasm from Democrats. This shifting political landscape could influence top trades as markets respond to the election’s potential outcomes.”
Trump narrowly leads Harris with 49% to her 47% in a direct contest, a difference that falls within the poll’s margin of error of plus or minus 3.1 percentage points. This close margin comes after Trump previously held a six-point advantage over President Joe Biden earlier in the month (before Biden withdrew from the race and endorsed Harris).
The shift in numbers suggests Harris has made significant gains following Biden’s exit, which occurred last weekend amidst internal party debates over his candidacy’s viability due to concerns about his age, mental fitness and electoral prospects for November.
The Wall Street Journal’s poll also showed a substantial increase in Harris’s favorability among registered voters, jumping from 35% to 46% — an 11-point rise. In contrast, Trump’s favorability was reported at 47%, with Biden’s at 39%.
The increase in Harris’s favorability comes in the wake of Biden’s departure from the race after a poor debate performance that led to heightened calls for him to step down. Since taking over as the Democratic frontrunner, Harris has garnered a series of key endorsements from within her party.
Given that the market was increasingly pricing in the ‘Trump Trade’, the situation could reverse soon as Harris continues to gain traction in polls. The Harris campaign team announced a significant fundraising milestone, having collected $200 million in the week after she became the presumptive nominee. The campaign’s financial boost is reflected by contributions from new donors, who represent 66% of the total funds raised in the past week.
Here are 3 top trades to consider if Harris wins the U.S. 2024 presidential election.
Buy Green Energy Stocks
The potential risks to green stocks if current U.S. climate policies, such as the Inflation Reduction Act (IRA), were to be repealed are enormous. Dismantling these policies could lead to an additional 4 billion metric tonnes of greenhouse gas emissions by 2030, according to some estimates.
The environmental impact of this, which includes increased floods, wildfires, and other extreme weather events, could incur global costs exceeding $900 billion. The IRA has been a significant driver for the resurgence of manufacturing in the United States, particularly in states that had previously seen a decline in critical industries.
Moreover, the legislation has been instrumental in job creation and improving the economic well-being of many Americans. The potential repeal of such policies poses a threat not only to the environment but also to the continued growth and stability of green stocks, which have been buoyed by the positive effects of the IRA.
Green stocks have underperformed in recent weeks amid an increase in the probability of Trump winning the election. However, a Harris win would almost certainly facilitate a buying wave of green stocks, making them top trades to consider. In this case, investors should consider names like Fluence Energy (NASDAQ:FLNC), First Solar (NASDAQ:FSLR), and Enphase Energy (NASDAQ:ENPH).
Buy Chinese Stocks
Analysts have been issuing warnings that former President Donald Trump would severely intensify his trade policies against China if he wins a second term in the White House.
Known for his aggressive trade stance, Trump plans to escalate the trade war and push for economic decoupling from China, moves that could further strain relations between the two global economic powerhouses.
During his first term, Trump prioritized trade issues with China, imposing tariffs and seeking to alter the trade balance. His administration’s policies aimed at reducing the United States’ trade deficit with China and bringing manufacturing jobs back to the U.S. A Trump victory in the upcoming election would likely escalate trade and economic tensions, leading to increased decoupling in trade and financial sectors.
In contrast, Vice President Harris is likely to uphold the current administration’s nuanced trade policies, employing a multilateral approach that targets more precisely than Trump’s broad tariff-based strategy.
Along these lines, investors should consider buying high-quality U.S.-listed China stocks like PDD (NASDAQ:PDD) and ZTO Express (NYSE:ZTO) as top trades.
Buy European Stocks
Similarly to China, the Eurozone will likely face tariffs if Trump wins in November. For this reason, the ‘Trump trade’ has seen inflows go into the U.S. equities, while leaving China and Europe. Data from EPFR Global indicates that US small-cap funds drew in $9.9 billion, the second-largest amount on record, while large-cap funds attracted $27.4 billion.
A day after the assassination attempt on Trump took place, European stocks had opened lower, as investors expected that the potential Trump win would hurt this part of the world. This is a clear indication that a Trump win would see European stocks trade under continuous pressure.
On the other hand, Harris winning the election would provide a boost to Europe-based equities, possibly at the expense of their American counterparts. Getting exposure to large-cap European stocks, like Novo Nordisk (NYSE:NVO), ASML (NASDAQ:ASML), Astrazeneca (NYSE:AZN), and SAP (NYSE:SAP) could prove to be a viable strategy.
On the date of publication, Shane Neagle did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
