MW Harris trades: These healthcare stocks could rally if she wins - or drop if Trump triumphs
By Victor Reklaitis
Trump trades include small-cap banks, which could benefit from a deregulatory push
While clean-energy names ICLN dominate the stocks expected to benefit from a Kamala Harris administration, some healthcare companies are in that camp as well, analysts at Evercore ISI said in a note Tuesday.
These healthcare companies - namely Centene Corp. $(CNC)$ and Molina Healthcare Inc. $(MOH.AU)$ - have significant Obamacare or Medicaid businesses, the analysts said. If Harris wins, she would be expected to use her executive authority to bolster enrollment while pushing Congress to extend enhanced Obamacare premium subsidies that expire at the end of 2025, according to Evercore's team.
Analysts at Bloomberg Intelligence made a similar point in a note last month. The BI analysts said: "Insurers such as UnitedHealth $(UNH)$ and Centene $(CNC.UK)$ could lose $25 billion in revenue from expiring Obamacare subsidies. A Harris victory might delay the bottom-line impact."
From MarketWatch's archives (Sept. 4, 2024): Centene's Medicaid pressures weigh on stocks of major insurers
To be sure, even as investors track stocks that are especially sensitive to the outcome of the White House race between Harris and Republican nominee Donald Trump, analysts have warned against getting carried away with "Harris trades" and "Trump trades," because presidential proposals could get blocked by Congress. Some of President Joe Biden's plans faced resistance even when his own Democratic Party controlled both the House and Senate.
Related: Harris or Trump may face a House or Senate run by the other party. Here's what that means for investors.
For the Evercore analysts, the list of Trump trades is dominated by financial companies XLF, especially small-cap banks, as they would benefit from a deregulatory push. Also on the list are prison operators Geo Group Inc. $(GEO)$ and CoreCivic Inc. $(CXW)$ as they're expected to "benefit from a Trump immigration crackdown" as well as a Trump Justice Department that would be "more willing to tolerate privatization," the analysts said.
Other plays viewed as Trump trades are bitcoin (BTCUSD) and other cryptocurrency-related companies or funds BKCH, as well as Trump Media & Technology Group Corp. $(DJT)$ and software provider Phunware Inc. $(PHUN)$
Related: 'DJT' and Trump-related stock Phunware had an eventful day. This is what people are saying about them.
And see: A stock-market 'Harris trade' is starting to take shape
Evercore's team came up with its lists of Harris trades and Trump trades - or "Blue Reactions" stocks and "Red Reactions" stocks - by screening the Russell 3000 index RUA for especially big next-day reactions to three pivotal events during this year's White House race. Those three events were the Biden-Trump debate on June 27, the July 13 assassination attempt on Trump and the Harris-Trump debate on Sept. 10.
Possible Harris trades
The Evercore analysts noted that some sectors such as pharmaceuticals PJP, semiconductors SMH and technology XLK generally don't make the cut as red or blue stocks. "This is consistent with our view that in certain areas, major differences between the candidates aren't yet clearly discernible - and the candidates may not ultimately be that different," they said.
Possible Trump trades
Now read: All of Kamala Harris's and Donald Trump's proposed tax breaks - in two charts
And see: Investors may have to wait a week before it's clear who controls the U.S. House. Here's why.
Plus: Betting markets put chance of Trump win at 3-month high, but analysts express some skepticism
-Victor Reklaitis
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(END) Dow Jones Newswires
October 23, 2024 14:32 ET (18:32 GMT)
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