Questions before you read the full text:
- What would the best result be for the US midterm elections?
- Which sectors or industries will see positive impact?
The mid-term election results are approaching, you may have interets in what industries or corporates would benefit from.
According to the current polls, the probability of Republicans regaining control of the House of Representatives has increased, and even regain control of the Senate.
For the past two years, Democrats have pushed for higher taxes and tighter rules, democrats voted in the Senate to support raising the corporate tax rate to 25% and imposing the world's lowest profit tax. If Republicans take over the House of Representatives after the midterm elections, the first task is to stop taxing too much,the tax increase idea will likely not be implemented, and the possibility of a windfall profit tax on oil companies in the Democratic plan will also disappear.
What's more, this article will share you the influences to industries such as energy, defense, pharmaceuticals, big technology, agriculture, finance, and new energy area, when the Republican Party successfully controls the Senate and House of Representatives.
1. Energy Industry
If republicans can secure a majority, U.S. domestic energy production going to exbanded . The U.S. House Energy and Commerce Committee, led by Republicans, will seek to boost hydrogen project development, simplify licensing and development of nuclear power plants, and speed up approvals for liquefied natural gas (LNG) export facilities for a variety of projects.
Companies that could benefit from the measures include U.S. nuclear operator $Southern(SO)$ , small modular reactor maker $NuScale Power(SMR)$, and liquefied natural gas exporter $Cheniere(LNG)$ Energy, among others. The plans could also benefit drillers such as $Halliburton(HAL)$ and oil producers such as $Exxon Mobil(XOM)$.
2. Military Industry
Given geopolitical tensions such as Ukraine, defense spending is expected to rise regardless of the vote. Arms makers and contracts could get a boost.
According to UBS Global Wealth Management's data, a Republican victory in the mid-term election would set the stage for a "substantial" increase in spending, while if Democrats win at least one seat, spending would increase only "moderately," . The S&P 500 aerospace and defense index is up nearly 10% this year.
The biggest U.S. defense contractors, including $Lockheed Martin(LMT)$ , $Raytheon(RTN)$, $General Dynamics Corp(GD)$ and $Boeing(BA)$present opportunities and risks.
3. Medical and Pharmaceutical Industry
Democrats empowered Medicare to negotiate drug prices under the Inflation Cuts Act to lower drug costs for Americans. For now, Republican leaders have tried to abandon promises to repeal the Affordable Care Act or restrict abortion rights, focusing instead on rising health care costs for Americans. The midterm elections could allow pharma and biotech stocks to benefit from a Republican victory.
Companies Including $ Pfizer (PFE.US) $, $ AbbVie (ABBV.US) $, $ Eli Lilly (LLY. US) $ and $ Merck & Co. (MRK.US) $ Merck & Co. (MRK.US) and other pharmaceutical companies‘ revenue outlook could all be affected by changes in drug pricing rules. Additionally, $Express Scripts(ESRX)$ , $CVS Health(CVS)$ , $HCA Holdings Inc(HCA)$, $Ascendis Pharma A/S(ASND)$ and $Tenet Healthcare(THC)$.
4. Technology Industry
In a Republican-controlled Congress, sweeping legislation targeting the anticompetitive behavior of tech companies such as $Apple(AAPL)$ , $Amazon.com(AMZN)$ and $Alphabet(GOOG)$ may not pass. House Republican leader Kevin McCarthy and future House Judiciary Committee chairman Jim Jordan have opposed the antitrust bill. If it can't be voted on in this Congress by the end of the year, the proposal will have to be reintroduced.
A Republican victory in the House or Senate could mean stalled legislation, which could mean a rebound in the sector. The tech-heavy Nasdaq 100 is down about a third this year.
5. Agriculture
The Farm Bill is the backbone of domestic agribusiness in the United States. A 5-year, $428 billion fiscal farm bill to be extended. The next Congress will need to pass another five-year farm bill on direct farm subsidies, crop insurance, food stamps and conservation programs. The 2018 Farm Bill authorized spending of $428 billion over the next five years, with about three-quarters in food aid and a quarter in agricultural support.
Additional subsidies for farmers helped boost sales at seed, pesticide, fertilizer and equipment suppliers such as $Mosaic(MOS)$ and $John Deere(DE)$, and also reducedCargill Inc., Archer-Daniels-Midland Co. and major grain buyers such as $Tyson(TSN)$'s costs on animal feed and poultry processors.
6. Finance
Financial regulation could be delayed or thwarted, and trading firms including $Robinhood(HOOD)$ stand to benefit from a Republican takeover of Congress. Republicans have been trying to block regulations planned by the SEC under Gary Gensler. Republican lawmakers can delay rulemaking by requesting information from the SEC and language in the annual appropriations bill asking the SEC to delay oversight.
And private equity firms and hedge funds could also benefit from the slowdown in SEC rulemaking. Gary Gensler's suggestion to force them to disclose more fee information and impose new restrictions has all drawn the ire of industry insiders.
7. Energy Vehicles Industry
Republicans have vowed to strictly monitor the powers of hundreds of billions of dollars in loans to the U.S. Department of Energy that the Biden administration passed. At the same time, U.S. automakers want to increase spending by $7 billion on electric vehicle charging stations, a demand particularly favored by automakers such as $General Motors(GM)$ and $Ford(F)$, but Republican lawmakers are likely to ignore them.
Recommend to read
Comments