The US election is well underway; more than one-third of registered U.S. voters have already turned in their ballots. While many outlets are reporting that Biden is favored to win, the numbers are still close enough to keep us on our toes until the final tallies come in.
If I learned anything from my years in the Scouts, its to make sure you are always prepared. Today we take a look at what may come from either a Biden or Trump victory.
📰 In the Headlines
Breaking down some of this week's biggest stories
Translation: The 2021 Boston Marathon has been postponed due to COVID concerns
This might be the end of a running era. The Wall Street Journal reported that rates of finishers in traditional road running races has dropped by 95% since the pandemic started. Organized races pump millions into local economies, but such a sharp drop in activity, many are wondering if it will ever be able to recover.
Translation: Tiffany’s is being bought by Louis Vuitton owner in the largest luxury brand purchase in history
If you thought their engagement rings were expensive, try $16 billion for the entire company. After months of dramatic negotiations and counter-lawsuits, French luxury goods conglomerate LVHN has agreed to follow through on their commitment to purchase the iconic NYC based jeweler, adding to their posh portfolio which includes Louis Vuitton, Moët Hennessy, Givenchy, and more.
Translation: Yesterday, Google, Twitter, and Facebook had to (virtually) face up to the House of Representatives
After their sweat-inducing testimonies during hearings in July, the Silicon Valley social media companies are back in from of our representatives, this time talking about how they are mediating content surrounding the current election. Yesterday, they had the chance to address the committees concerns, and try to avoid changes to a provision of a 1996 law that has been the foundation for unfettered speech on the internet.
🗳 Politics Aside
When it comes to investing, it best to leave your personal opinions at the door.
However, recent history has shown that the President's agenda can have a big impact on how traders value stocks both short & long term.
Here are what industries we'll be keeping an eye on in the event of each candidate winning the election:
If America Goes Blue
Biden was one of the few Democratic candidates that didn't favor Medicare for All; instead, he wants to build on Barack Obama's flagship legislation, the Affordable Care Act. For-profit healthcare companies will have big opportunities if Biden wins, and the new innovative tele-medicine players will see renewed optimism as well.
☀️ Renewable Energy
Biden has made it clear that he plans to reinstate environmental protections and focus on cleaner energy sources. He has committed to investing $400 billion over ten years in clean energy infrastructure and innovation, which would be a big win for the companies developing and manufacturing the technology behind it.
Both Biden and his running mate, Kamala Harris, have made bold commitments to decriminalizing marijuana, and even clearing the path for federal legalization. Stocks have surged just from the mention of it during the campaign. If they are elected next week, that spells a pretty sunny outlook for the growers and distributors of this controversial crop.
If America Stays Red
If Donald knows how to do anything, it’s stir up some headlines. Although he may be critical of the media, Trump has been great for those the news business. Both traditional and social media have benefited from the headlines and rapid news cycle our current chief commands. And if he gets re-elected, we are in for four more years of Tweets, Op-Eds, and exposes.
Trump's Tax Cut and Jobs Act have slashed corporate tax rates to historical lows, which was particularly good for banks. Biden has proposed reinstating many of these taxes as a way to reduce our national debt, which would limit how much cash these banks would have on hand and lower the dividend they could pay to shareholders. This means big banks would have more to gain if Trump secures another victory.
The House of Representatives committee released a 449-page report accusing all four companies of exercising monopoly-like power and abuse. During the coronavirus pandemic, each company has gained market power, and all four stocks have soared, making a breakup likelier.
Google, Amazon, Apple
Let's Keep In Mind
Just because an industry has a lot to gain from a President's policies, doesn't always mean those gains will actually happen. Getting federal laws and budget changes passed is a complex and slow process, so it may take years for some of these industries to really see the benefit. Our advice? Always do your own research on companies you plan to invest in, and know that buying any stock comes with a risk.
Word of the Day
(n.) Short for Market Capitalization. A quick way to see how much a company is worth.
The total value of all their stock, which is calculated by multiplying the current price of one share of the company's stock by the amount of shares available. Example: If one share of Company A's stock is worth $100, and they have 1,000 shares available on the stock market, their Market Cap would be $100,000.
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