Sustainability Of Energy Stocks Is Clouded By 2024 Election Uncertainty

Blockhead10-11

Investing in energy stocks, be they traditional oil and gas companies or renewable startups, is not for the faint of heart. That's especially true ahead of the 2024 presidential election. Wars — the ...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2474099723?lang=en_US&edition=fundamental","thumbnail":"https://www.investors.com/wp-content/uploads/2024/10/A1MAIN_sustain_101124_Gash-150x150.jpg","is_english":true,"pubTime":"2024-10-11 20:30","share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","id":"2474099723","market":"nz","top_or_hot":-1,"title":"Sustainability Of Energy Stocks Is Clouded By 2024 Election Uncertainty","media":"Blockhead","content":"<div>\n<p>Investing in energy stocks, be they traditional oil and gas companies or renewable startups, is not for the faint of heart. That's especially true ahead of the 2024 presidential election. Wars — the ...</p>\n\n<a href=\"https://www.investors.com/news/energy-stocks-sustainability-2024-election/\">Source Link</a>\n\n</div>\n","source":"investor_business_daily_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Sustainability Of Energy Stocks Is Clouded By 2024 Election Uncertainty</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSustainability Of Energy Stocks Is Clouded By 2024 Election Uncertainty\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-10-11 20:30 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.investors.com/news/energy-stocks-sustainability-2024-election/><strong>Blockhead</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Investing in energy stocks, be they traditional oil and gas companies or renewable startups, is not for the faint of heart. That's especially true ahead of the 2024 presidential election. Wars — the ...</p>\n\n<a href=\"https://www.investors.com/news/energy-stocks-sustainability-2024-election/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU1732799900.SGD","symbol_name":"JPMorgan Investment Funds - Global Income A (irc) SGD-H","start_time":0,"source_url":"https://www.investors.com/news/energy-stocks-sustainability-2024-election/","article_id":"2474099723","we_media_id":null,"thumbnails":["https://www.investors.com/wp-content/uploads/2024/10/A1MAIN_sustain_101124_Gash-150x150.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2474099723","pubTimestamp":1728649817,"sourceInfo":{"source_id":"investor_business_daily_highlight","name":"Investor’s Business Daily"},"weMediaInfo":null,"summary":"The 2024 elections add a new layer of uncertainty for energy stocks, whether \"sustainable\" or not. We break down the postelection outlook for investors.","collect":0,"end_time":0,"defaultTopTitle":"investors.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU1732799900.SGD":"JPMorgan Investment Funds - Global Income A (irc) SGD-H","SO":"美国南方公司","LU2346227817.USD":"BGF SUSTAINABLE GLOBAL INFRASTRUCTURE \"A2\" (USD) ACC","UNH":"联合健康","LLY":"礼来","ICLN":"iShares S&P Global Clean Energy","FSLR":"第一太阳能","GEV.AU":"Global Energy Ventures","LU0128525929.USD":"TEMPLETON GLOBAL \"A\" (USD) ACC","CVX":"雪佛龙","LU0053666078.USD":"摩根大通基金-美国股票A（离岸）美元","TAN":"太阳能ETF-Guggenheim","HK0000320223.HKD":"TAIKANG KAITAI CHINA NEW OPPORTUNITIES FUND \"A\" (HKD) ACC","LU0256863902.USD":"ALLIANZ US EQUITY \"AT\" (USD) ACC","LU0385154629.USD":"贝莱德营养科学基金A2","LU1435385759.SGD":"Natixis Loomis Sayles US Growth Equity RA SGD-H","LU2211814178.USD":"ALLIANZ CLEAN PLANET \"AT\" (USD) ACC","LU1732800096.USD":"摩根大通环球收益基金A (irc)","LNT":"美国联合能源","NVDA":"英伟达","AVGO":"博通","JPM":"摩根大通","LU0654597011.USD":"BGF NATURAL RESOURCES \"A4G\" (USD) INC","ESGV":"Vanguard ESG US Stock ETF","LU2272731600.USD":"Allianz Global Intelligent Cities AM Dis USD","LU2322448791.USD":"ALLIANZ GLOBAL INTELLIGENT CITIES INCOME \"AMG\" (USD) INC","LU1582986433.USD":"M&G (LUX) INCOME ALLOCATION \"A-H\" (USDHDG) INC","LU2264538146.SGD":"Fullerton Lux Funds - Global Absolute Alpha A Acc SGD","LU0683600562.USD":"AB SELECT US EQUITY \"A\" (USD) ACC","LU2322448957.HKD":"ALLIANZ GLOBAL INTELLIGENT CITIES INCOME \"AMG\" (HKD) INC","GEV":"GE Vernova Inc.","3NVD.UK":"LS 3X NVIDIA","LU1150488218.USD":"First Eagle Amundi Income Builder AU2-MD USD","L":"洛斯公司","XLE":"SPDR能源指数ETF","LU0215105999.USD":"SCHRODER ISF GLOBAL EQUITY \"A\" ACC","NRG":"NRG能源","MCO":"穆迪","LU0122379950.USD":"贝莱德世界健康科学A2","2NVD.UK":"2X NVIDIA ETP","LU0316494557.USD":"FRANKLIN GLOBAL FUNDAMENTAL STRATEGIES \"A\" ACC","XOM":"埃克森美孚","BK4503":"景林资产持仓","CL":"高露洁","BEP":"Brookfield Renewable Partners LP","AAPL":"苹果","BN":"Brookfield","BK4505":"高瓴资本持仓","HK0000320264.USD":"TAIKANG KAITAI CHINA NEW OPPORTUNITIES FUND \"A\" (USD) ACC"},"translate_title":"2024年大选的不确定性给能源股的可持续性蒙上阴影","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"XOM":1,"MCO":1,"NRG":1,"LNT":1,"LLY":1,"ICLN":1,"SO":1,"TAN":1,"GEV.AU":1,"GEV":1,"FSLR":1,"CVX":1,"CL":1,"BN":1,"UNH":1,"XLE":1,"ESGV":1,"BEP":1,"AAPL":0.7,"AVGO":0.7,"NVDA":0.7,"JPM":0.7,"3NVD.UK":0.6,"L":0.6,"2NVD.UK":0.6},"content_text":"Investing in energy stocks, be they traditional oil and gas companies or renewable startups, is not for the faint of heart. That's especially true ahead of the 2024 presidential election. Wars — the shooting kind and the trade kind — can upend even the best strategies in unexpected ways. So can volatile commodity prices and government policy shifts.\nConsider what happened after President Joe Biden's signature climate law, the Inflation Reduction Act, squeaked through Congress in the summer of 2022. The IRA provides hundreds of billions of dollars to hasten the transition to renewable energy. Many investors expected clean-energy stocks to soar and fossil fuel stocks to sink.\n\n\n\n↑\nX\n\n\n\n\nTop Stocks For Green Investing Revealed: IBD's List Of Leading Sustainable Companies\n\n\nSee All Videos\n\n\n\n\nNOW PLAYING\nTop Stocks For Green Investing Revealed: IBD's List Of Leading Sustainable Companies\n\n\n\n\nInstead, the opposite occurred. Renewable-energy companies were hurt by rising interest rates, inflation, supply-chain problems and consumer hesitancy about electric vehicles. Meanwhile, Russia's invasion of Ukraine boosted oil prices and profits. U.S. oil production reached all-time highs. In the two years after the climate law passed, the iShares Global Clean Energy ETF (ICLN) dropped 37%. The Energy Select Sector SPDR Fund (XLE), dominated by ExxonMobil (XOM) and Chevron (CVX), rose 14%.\nThis volatility is reflected in IBD's special report on the most sustainable companies — those companies successfully preparing for the transition to a low-carbon economy.\nIBD's 100 Most Sustainable Companies\nTo build IBD's 2024 list of the 100 Most Sustainable Companies, we started with Morningstar's U.S. and global Low Carbon Transition Leaders Indexes. These new indexes provide exposure to companies from each sector that are taking the most action toward transitioning to a low-carbon economy. We sorted the constituents of the Morningstar indexes using IBD technical and fundamental stock ratings.\n The result is a list of 100 stocks that combine strong climate management scores from Morningstar Sustainalytics with superior stock attributes. They are well-positioned for investors concerned about the climate transition.\nThe stocks had to have a price of $10 or more and sufficient data to create an IBD Composite Rating. We further qualified the list by removing stocks that did not meet or beat the S&P 500 in the past five years or had an IBD Relative Strength rating below 70. We selected the companies with the highest IBD Composite Rating — all with scores of 80 or better, putting them in the top 20%.\nFinally, we ranked the companies by their Morningstar Sustainalytics climate management score, using the IBD Composite Rating to break any ties. \nRanking atop the list this year are financial services company Moody's (MCO), utility Southern Co. (SO) and consumer giant Colgate-Palmolive (CL).\n\nRead all the stories in our full special report: IBD's 100 Most Sustainable Companies For 2024\n\n2024 Election Impacts Companies' Sustainability And Stocks\nNow the 2024 election is adding yet another layer of uncertainty and complexity for energy stocks and investors. Along with health care, energy is perhaps the market sector most sensitive to politics.\nA Democratic victory in November would keep the government push toward decarbonization on track and provide a more favorable political climate for sustainable investing based on environmental, social and governance, or ESG, principles. A Republican win would produce stiffer headwinds for renewable energy and renewed attacks on what critics call \"woke\" investing.\nTopsy-Turvy Presidential Race Clouds Outlook For Energy Stocks\nWhatever the 2024 election outcome, some of the consequences are likely to be just as counterintuitive as what transpired after the IRA became law. If Donald Trump reclaims the White House, his \"drill, baby, drill\" agenda wouldn't necessarily be an unadulterated boon to Big Oil. It could also promote an oversupply that would drive down prices and earnings.\n\"There is a point at which drilling for the sake of drilling doesn't work,\" said Rob Haworth, senior investment strategy director at U.S. Bank Wealth Management. \"The more we drill, the tougher it is for companies to actually make profits.\" In the past five years, he notes, oil producers have become less focused on maximizing output and more on returning capital to investors through dividends and share repurchases.\nThis year's topsy-turvy presidential race shows how difficult it can be to make decisions about energy stocks based on predictions of 2024 election outcomes. After Joe Biden's disastrous performance in the debate on June 27, it looked like Donald Trump might cruise to victory. Then Biden stepped aside, and Vice President Kamala Harris claimed the Democratic nomination.\nHarris' prospects improved after the Sept. 10 debate, where she moderated her views on fossil fuel production. As a California senator who was seeking the 2020 Democratic presidential nomination, Harris said she would ban the controversial fracking process of extracting oil and gas. But since joining the Biden administration and during the debate, she has said she would not ban fracking.\nInflation Reduction Act's Impact After Election 2024\nFor energy-focused investors, much is riding on the fate of Biden's climate law once he leaves office. If Harris succeeds him, implementation of the IRA can be expected to continue apace. First Solar (FSLR), a U.S.-based solar manufacturer that is a prime beneficiary of IRA incentives, soared 15.2% the day after the debate.\n\"Steady as she goes is probably the right way to think about it,\" said Sasha Mackler, executive director of the Bipartisan Policy Center's energy program.\nBeyond continuing to put the IRA into effect, Harris could move to restrict fossil fuel production on federal lands or require oil and gas companies to pay higher royalties. A Harris administration might also crack down on heat-trapping methane emissions and impose other new environmental regulations. These steps, however, could run the risk of being struck down in the courts if they weren't approved by Congress.\n\"We would not expect Harris to take an extreme approach toward the oil and gas industry,\" wrote Coco Zhang, who covers ESG topics for ING Bank. \"U.S. oil output would likely continue to hit record highs.\"\nIf Trump wins, the outlook gets more complicated. He has called for repeal of the IRA and mocked \"windmills\" and other forms of renewable energy. He has derided ESG principles as \"radical-left garbage.\"\n\nRead More About The Top Winners On Our Most Sustainable Companies List: NRG Energy, Moody's, T-Mobile US\n\nEven For Trump, The IRA Could Be Hard To Kill\nFormer President Trump has also routinely ridiculed electric vehicles, though his disdain for EVs became somewhat tempered after he received the full-throated endorsement of Elon Musk, CEO of Tesla (TSLA) and owner of X, the social media company formerly known as Twitter.\nIf the 2024 election returns Trump to the White House, most analysts don't expect the IRA to be fully repealed. However, parts of the law could be gutted administratively. In Washington, it's harder to enact a new program than to kill an existing one that has developed a supportive constituency.\n\"When there is a conversation on reforming the IRA in 2025 under a new presidential administration, my intuition is that we are going to find that's a much more difficult proposition than it sounds at first blush,\" Mackler said. \"Many of the tax credits have bipartisan support. The lion's share (of benefits are going to) red states and red districts. Republican support is stronger than you might imagine, so that's going to be difficult to unwind.\"\nThe most vulnerable parts of the IRA, analysts say, are the EV tax credits. They provide rebates of up to $7,500 for purchasers of certain vehicles. Also at risk is a $27 billion fund to set up \"green banks\" and other greenhouse-gas reduction programs around the nation. Least vulnerable: incentives for carbon capture technologies, clean hydrogen and domestic manufacturing.\nIRA Repeal Risk Could Hit Energy Stocks\nNatalia Luna, an investment analyst at Columbia Threadneedle, agrees that full repeal of the IRA is unlikely, even if Republicans win in November. A partial repeal \"could be the most likely outcome, and the market is underappreciating this risk and all the investment implications that go with it,\" according to her sector-by-sector analysis.\n\nPartial repeal could involve capping or shortening the availability of some of the tax credits, cutting funding for programs administered by the Environmental Protection Agency and Department of Energy, and reversing EPA emissions rules.\nGiven all the political moving pieces, how can investors navigate the 2024 election uncertainties when it comes to energy stocks?\n\"I think the key is, regardless of the outcome, to not overreact one way or the other,\" said Brett Castelli. He follows clean energy for Morningstar and recommends that investors focus on individual companies.\nEnergy stocks are part of \"a specific sector that is tough to invest in via mutual funds and ETFs. And the reason is that the quality of companies within the space varies wildly,\" Castelli said. \"The easy thing for investors to say is: Clean energy is going to grow, so let me just buy a mutual fund or ETF. But, in reality, it's not that easy.\"\nThis space is intensely competitive, Castelli says. \"Investors really need to select companies that both have exposure to the long-term growth of the clean-energy sector but also have some sort of competitive advantage. That will allow them to protect profits long term as more competition comes into the sector,\" he said.\n\n\n\nIBD Newsletters\nGet exclusive IBD analysis and actionable news daily.\n\n\nSIGN UP NOW!\n\n\n\n\n\nIBD Newsletters\nGet exclusive IBD analysis and actionable news daily.\n\n\n\n\n\n\t\t\t\t\t\t\t\tHow To Invest\t\t\t\t\t\t\t\t\n\n\n\n\n\n\t\t\t\t\t\t\t\tMarket Prep\t\t\t\t\t\t\t\t\n\n\n\n\n\n\t\t\t\t\t\t\t\tTech Report\t\t\t\t\t\t\t\t\n\n\n\n\n\nPlease enter a valid email address\nPlease select a newsletter\n\n\nGO\nGet these newsletters delivered to your inbox & more info about our products & services. Privacy Policy & Terms of Use\n\nx\n\n\n\nThank You!\nYou will now receive IBD Newsletters\n\n\nALL DONE!\n\n\n\n\nSomething Went Wrong!\nPlease contact customer service\n\n\nCLOSE\n\n\n\n\nFollow Companies Poised To Profit From Electricity Demand\nTwo energy stocks that Castelli likes are Brookfield Renewable Partners (BEP), a global owner and developer of renewable projects, and GE Vernova (GEV), the General Electric spinoff that is poised to benefit from rising electricity demand from data centers, the use of artificial intelligence and recharging EVs.\nBrookfield Corp. (BN), which is on the IBD 2024 list of the 100 most sustainable companies, is the parent organization of Brookfield Renewable.\nIn addition to the financial incentives provided in the 2022 climate law, lower inflation and interest rates should boost clean-energy stocks more broadly. That's because they typically have to borrow to finance growth and new projects.\nFor environmentally conscious investors who are queasy about the volatility of clean-energy stocks, another option might be mutual funds and ETFs that invest in companies with high sustainability ratings. In the two years after the IRA was enacted, the Invesco Solar ETF (TAN) lost more than half its value. But the Vanguard ESG U.S. Stock ETF (ESGV) — which holds tech companies such as Apple (AAPL) and Nvidia (NVDA) — increased 28% during the same period.\nNvidia also is on the 2024 IBD list of 100 most sustainable companies. Other stocks in ESGV that made the IBD list include Broadcom (AVGO), Eli Lilly (LLY), JPMorgan Chase (JPM) and UnitedHealth Group (UNH).\nOn IBD's list of most sustainable companies, utilities ranked highly, including Southern Co., Alliant Energy (LNT) and NRG Energy (NRG). All three rank among the top five stocks on the list.\nThere's No Turning Back For Energy Stocks\nElection 2024 aside, analysts say investors in the energy sector must recognize that two things are simultaneously true.\nOne is that the need for fossil fuels isn't going away anytime soon. In the U.S., EVs represent slightly more than 1% of the 288.5 million vehicles on the road and less than 10% of new-car sales. The U.S. and the rest of the world will need fossil fuels for decades to come.\nThe second truth is that the shift toward cleaner sources of energy in a warming world is irreversible. The question isn't so much whether it will happen, but when and how quickly. \"Coal is not coming back,\" said Castelli. \"The clean energy transition will continue regardless of who is in the White House.\"\nYOU MAY ALSO LIKE:\nIBD's 100 Most Sustainable Companies For 2024\nIBD's Three Most Sustainable Companies In 11 Industry Categories\nFind Today's Best Growth Stocks To Watch With IBD 50\nJoin IBD Live Each Morning For Stock Tips Before The Open","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"Policy And Regulatory","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2474099723"}