Investing Strategies: How the Markets Could be Impacted by a Second Term for Biden
As the 2024 presidential election approaches, investors are beginning to consider the potential impact of a second term for President Joe Biden. While it’s difficult to predict exactly how the markets will react, there are a number of factors to consider.
One possibility is that a Biden win would lead to a continuation of the “status quo” in the markets. According to Bernstein analyst Mark Schilsky, a second term for Biden would likely be viewed by investors as a continuation of current conditions. In this scenario, mega-cap growth stocks, such as Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla, could continue to perform well.
However, Schilsky notes that these technology giants could also face increased regulatory threats from the Department of Justice and the Federal Trade Commission. Alphabet and Amazon, in particular, have been the targets of lawsuits in recent years. While investors currently seem unconcerned about regulatory risk, that could change if Biden is reelected.
Another potential impact of a second Biden administration is the continued limitation of mergers and acquisitions activity. Schilsky notes that the threat of government lawsuits has hindered investment banks and affected interest rates. A second Biden term would likely mean that the DOJ and FTC will continue to sue to block major deals, regardless of their likelihood of success.
One additional area to consider is the potential for increased regulation of Chinese companies. Both Biden and former President Donald Trump have expressed concerns about China, and if Biden is reelected, he may be more willing to take action against Chinese companies. Schilsky suggests that TikTok and other Chinese companies could be on the receiving end of US regulations.
Biden’s Second Term: How Mega-Cap Growth Stocks Could Benefit
According to Bernstein analyst Mark Schilsky, a second term for President Joe Biden could favor mega-cap growth stocks. This is based on historical performance, as these stocks have excelled since early 2021, particularly in Biden’s first and third years in office.
Schilsky suggests that a continuation of current conditions could benefit the “Magnificent 7” stocks: Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. These companies have already seen strong growth in recent years, and a second term for Biden could further support their performance.
However, it’s worth noting that these same companies could face increased regulatory threats under a second Biden administration. Alphabet and Amazon have both been the targets of lawsuits in recent years. While investors may not be overly concerned about regulatory risk at the moment, it’s possible that this could change if Biden is reelected.
Regulatory Risks for Tech Giants Under a Second Biden Administration
One of the potential risks for tech giants under a second Biden administration is increased regulation. According to Bernstein analyst Mark Schilsky, a second term for President Joe Biden could see the Department of Justice and the Federal Trade Commission continuing to issue lawsuits against companies like Alphabet and Amazon.
While investors may not be overly concerned about regulatory risk right now, there is no reason to think that these lawsuits will diminish under a second Biden administration. This could temporarily depress share prices and create uncertainty for investors.
In addition to the regulatory risks, a second term for Biden could also lead to a crackdown on Chinese companies. Both Biden and former President Donald Trump have expressed concerns about China, and if Biden is reelected, he may be more willing to take action against Chinese companies. This could result in increased regulations and potential limitations on these companies’ operations in the US.
Overall, while a second term for Biden may not spook the markets, there are potential regulatory risks that investors should be aware of. Tech giants, in particular, could face increased scrutiny and regulatory challenges under a second Biden administration.
The Potential Impact of a Trump Victory on Investment Portfolios
While the 2024 presidential election is still a few months away, investors are already considering the potential impact of a second term for former President Donald Trump. According to Bernstein analyst Mark Schilsky, a Trump victory would represent significant change, especially if the GOP were to control both the House and Senate.
Under a Trump presidency, investors would need to reshuffle their assets and consider the potential impact on various sectors and industries. One potential outcome of a Trump victory is a friendlier regulatory environment for large corporations. Companies like Alphabet, Amazon, and Live Nation Entertainment could see their government lawsuits dropped under a second Trump administration.
Another area that could benefit from a Trump victory is the ridesharing and delivery industry. Companies like Lyft, Uber, and DoorDash could benefit if their gig workers are considered contractors instead of employees. This could have a significant impact on these companies’ business models and profitability.
Trump’s presidency could also lead to increased dealmaking and consolidation within the market. Small- and medium-sized companies could be acquired by larger corporations, particularly in the media and entertainment industries. Paramount Global, Warner Bros. Discovery, Lions Gate Entertainment, AMC Networks, and Cable One are some of the top candidates for acquisitions under a second Trump administration.
Overall, a Trump victory could lead to significant changes in the investment landscape. Companies battling government regulators could see some relief, while smaller companies may become acquisition targets for larger corporations.
Winners and Losers: How different sectors would fare under another term for Trump
While a second term for former President Donald Trump could bring significant changes to the investment landscape, it could also create winners and losers within different sectors. According to Bernstein analyst Mark Schilsky, a Trump victory would likely result in a friendlier regulatory environment for large corporations.
One sector that could benefit from a second Trump administration is telecommunications. Larger US-based media companies, such as Fox Corp and the three big wireless networks – T-Mobile, AT&T, and Verizon – could see gains if corporate taxes fall again. Additionally, profitable internet firms like Match Group, eBay, and Expedia could also benefit from lower taxes.
Companies in the entertainment and media industry may also see positive impacts under a second Trump administration. Media firms like Paramount Global, Warner Bros. Discovery, Lions Gate Entertainment, AMC Networks, and Cable One could all be potential acquisition targets, leading to potential gains for shareholders.
On the other hand, some sectors could face challenges under a second Trump administration. Companies in the cable industry, such as Charter and Cable One, could be negatively impacted if Biden’s Bipartisan Infrastructure Law is repealed. Additionally, companies in the tech industry could face increased competition and regulatory challenges, as a Trump victory could result in the regulatory environment softening considerably.
Overall, a second term for Trump would likely result in winners and losers within different sectors of the market. While some sectors could see gains, others may face challenges depending on the policies put forth by the administration.
Analyst comment
Positive: Biden’s second term could favor mega-cap growth stocks like Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. These companies have already seen strong growth and could benefit from a continuation of current conditions.
Negative: Tech giants like Alphabet and Amazon could face increased regulatory threats under a second Biden administration. Lawsuits and regulatory challenges could create uncertainty for investors and temporarily depress share prices.
Neutral: A second term for Biden may not spook the markets, but there are potential regulatory risks that investors should be aware of. Tech giants could face increased scrutiny and regulatory challenges, and there could be a crackdown on Chinese companies.
Positive: A Trump victory could lead to a friendlier regulatory environment for large corporations and potentially drop government lawsuits. Companies like Alphabet, Amazon, and Live Nation Entertainment could benefit.
Positive: The ridesharing and delivery industry could benefit from a Trump victory if gig workers are considered contractors instead of employees. Companies like Lyft, Uber, and DoorDash could see significant impacts on their business models and profitability.
Positive: A Trump victory could lead to increased dealmaking and consolidation within the market, particularly in the media and entertainment industries. Small- and medium-sized companies could be acquired by larger corporations.
Neutral: A Trump victory could bring significant changes to the investment landscape, with companies battling government regulators potentially seeing relief and smaller companies becoming acquisition targets.
Positive: A Trump victory could create a friendlier regulatory environment for large corporations, benefiting sectors like telecommunications and profitable internet firms.
Positive: The entertainment and media industry could see positive impacts under a second Trump administration, with potential acquisitions and gains for companies such as Paramount Global, Warner Bros. Discovery, Lions Gate Entertainment, AMC Networks, and Cable One.
Negative: Some sectors, such as cable companies and the tech industry, could face challenges under a second Trump administration. Repealing Biden’s infrastructure law and increased competition and regulatory challenges could impact these sectors.
