On this pivotal Election Day, markets are buzzing with activity, not only because of the voting but with the Fed’s potential rate cut and China’s NPC meeting on the horizon. Adding to the mix, over 100 S&P 500 companies are set to report earnings this week. Jared Levy, Chief Market Strategist at Peak American Financial, shared insights on strategies for both presidential outcomes.
Market Dynamics Amid Election and Earnings Season
With markets anticipating volatility, investors are eyeing potential moves depending on the election outcome. If Trump takes office, Levy highlights sectors such as financials, infrastructure, and gold as potential winners, while companies dependent on Chinese imports, like Dollar General and Walmart, might face challenges. On the other hand, a Harris-led administration could see surges in home-building and healthcare, with homebuilders and insurers likely benefiting from her stance on housing affordability and healthcare access. However, drug manufacturers may feel pressure with expected regulatory scrutiny.
Insights on Health Sector Split
For healthcare, the election outcome could have a dual impact. Under a Harris administration, insurers like United Healthcare may thrive, while pharmaceutical companies might face challenges due to possible reforms aimed at reducing drug prices.
Lessons from Past Elections
Levy advises investors to be cautious and vigilant. Reflecting on the 2019 election rally followed by the early 2020 downturn, he stresses that regardless of the election’s outcome, there’s potential for market relief and recalibration. Keeping an eye on the Fed’s stance, especially in relation to a possible rate cut, will be key for short-term positioning.
Conclusion
Election years always bring a unique mix of excitement and uncertainty. With market-moving events clustered around this busy week, Levy suggests focusing on sectors poised for resilience depending on the outcome, all while maintaining a disciplined approach to manage potential post-election volatility.
CLICK HERE to watch Jared Levy on Business First AM covering his election trades.
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