The 2024 US Presidential election is upon us, and Wall Street is buzzing with anticipation about the potential impact on specific sectors. JPMorgan’s Bill Peterson has outlined a clear split in potential stock moves based on the election outcome.
A Democratic Win: Clean Energy Takes Center Stage
If a Democrat wins the election, the clean energy sector is expected to receive a significant boost. This would be particularly beneficial for companies involved in electric vehicles (EV) and hydrogen technologies. JPMorgan highlights EVgo Inc (EVGO), ChargePoint Holdings Inc (CHPT), and lithium players like Lithium Americas Corp (LAC) and Piedmont Lithium Inc (PLL) as potential winners under a Democratic administration. The continued government support for clean energy initiatives, fueled by the Inflation Reduction Act and the Department of Energy’s Loan Programs Office, is expected to drive investor confidence and propel stocks like Plug Power Inc (PLUG).
A Republican Victory: Steel Industry Benefits
On the other hand, a Republican victory, specifically a Donald Trump win, could lead to a bullish scenario for the steel sector. Domestic steel producers like Nucor Corp (NUE), Steel Dynamics Inc (STLD), and Cleveland-Cliffs Inc (CLF) are likely to benefit from Trump’s protectionist policies that aim to safeguard U.S. steel prices. Peterson emphasizes that Trump’s stance against the proposed acquisition of U.S. Steel by Nippon Steel Corp (NISTF) could further spotlight domestic operators. Additionally, the Trade Expansion Act Section 232 tariffs could make U.S. steel prices more attractive, giving companies like Kaiser Aluminum Corp (KALU) an advantage over Constellium SE (CSTM) due to Kaiser’s strong U.S. presence.
The Importance of Supply Chain Security
Regardless of the election outcome, the focus on Western supply chain security remains a key factor. This positions companies involved in rare earth and graphite production, such as MP Materials Corp (MP) and GrafTech International Ltd (EAF), favorably. For base metals, companies like Alcoa Corp (AA) and Freeport-McMoRan Inc (FCX) could be affected by intensified China tariffs, with pricing fluctuations dependent on global stimulus responses.
A Wait-and-See Game for Investors
The 2024 election will undoubtedly shape market dynamics, leading to distinct paths for metals, mining, and clean tech sectors. Investors in these areas are advised to closely monitor the election results and their potential impact on their portfolios. While the outcome remains uncertain, one thing is clear: this election will be crucial for the future of these industries.