Insights

The US presidential election, as always, has everyone’s attention. The “not-so-presidential” debates have made it even more interesting for viewers, speculators and investors alike. This election year has driven voter interest in rather diverse matters such as the pandemic’s impact and related control measures, global trade and geopolitical issues (with China at the forefront), and racial inequality (Black Lives Matter) to the debating stage. Amid all these geo- and socio-political issues, we wish to focus on the likely impact the candidate US citizens vote for will have on the economy, major sectors and markets.

Key Takeaways

• President Trump fulfilled some of the noteworthy promises made in his past campaigns,
  and the economy fared well during his tenure. However, his performance in terms of
  promised upgrades to the country’s infrastructure and tactical management of the
  COVID-19 outbreak remain questionable.
• Rather than predicting a winner, we believe the principal investment strategy should
  revolve around assessing the consequences of possible outcomes. We focus on implications
  of a Donald Trump or Joe Biden win for major sectors, centred on their respective policy
  stance and campaign promises.
• If the status quo is maintained, we believe big-ticket sectors such as financials, defence,
  and energy will continue to benefit, while major energy-dependent regions such as Texas
  are revived. Other sectors will be better off due to the lower regulatory burden and tax rates
  amid the current COVID-19-related slowdown.
• A leadership change will likely be favourable for key sectors such as utilities, infrastructure,
  renewables, and healthcare as the economy thrives due to an expected increase in
  consumption, a narrow fiscal deficit, the push for a clean environment and less global
  trade uncertainty on hopes of successful trade negotiations with China.


Author

Nimit Sharma

Assistant Director, IR

Nimit has been a part of Acuity Knowledge Partners Investment Research team for over 9 years. His core expertise in extensive financial modelling and research writing spanned through several industries including Financials, Energy, TMT, Consumer, Healthcare, Industrial Waste, and Paper & Packaging. At present, he is responsible for setting up new teams, managing existing teams and projects, assuring quality of services, taking client feedback, and providing subject matter expertise.

He holds an MBA in Finance from Institute of Management Technology, India. He has completed training in Foundations in Responsible Investment from PRI Academy, and holds Certificates of Excellence in Six Sigma discipline and Minto Pyramid writing practice.

US election: Who wins what?

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