Citi put out analysis today listing “20 election trades to track.” Note that Citi calls them “election trades,” not “Trump trades,” which is a sober-minded way to put it.
Some of these trades are arcane, but I’ll highlight a few for a mainstream audience.
Solar energy: Up with a Harris win, down with a Trump win.
Fossil fuels: Not as pro-Trump as you might think because “drill, baby, drill” implies more supply and, therefore, lower prices, which is bad for Big Oil profits.
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Deregulation: Good for Financials if Trump wins.
Tariffs: Trump wants much higher import tariffs, which is bearish for physical goods that are easier to tax but neutral for services or digital products (software) that are harder to tax.
Inflation: More likely under Trump than Harris because tariffs are inflationary, among other things. Higher inflation implies higher interest rates under a Trump administration than a Harris administration, and some of that is priced into markets already. If Harris wins, 10-year Treasury rates could drop slightly, bringing mortgage rates and other consumer rates down with them.
Antitrust: Trump is more likely to allows corporate mergers and mashups, which could benefit smaller biotech firms in position to be acquired by bigger ones.
Housing: Trump doesn’t really have a housing policy, and if interest rates are in fact higher under him, it would be a negative for home buyers and home builders. Both could do better under Harris, due to lower rates and federal incentives to build more affordable housing.
I’m eagerly looking forward to post-election market action to see how much of these “election trades” markets priced in ahead of the voting, along with what markets overpriced and what markets underpriced.
Rick Newman is a senior columnist for Yahoo Finance. Follow him on Twitter at @rickjnewman.
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