Harris' advisers look to reset relations with crypto industry, UBS explores potential election outcome In this recurring series, The Fly recaps where the top analysts on Wall Street say to put your money ahead of November's U.S. presidential election. In this edition, Harris' advisers approach top crypto companies about "resetting" relations with the industry. Meanwhile, UBS explores the market's potential response to the election outcome.
UBS EXPLORES ELECTION OUTCOME: UBS said its work indicates that election outcomes are not fully baked into today's market expectations, which is even more so the case since Vice President Kamala Harris became the Democrat's presumptive nominee. In a Tuesday note to investors, the firm said it expects Harris' policies would be a continuation of President Biden's and that investors largely expect the economic response to a Trump victory to be less regulation, an extension of lower tax rates, larger deficits and/or higher rates and inflation, and more restrictive trade policy, particularly with China. UBS believes Trump would focus on border issues first, followed by regulatory issues under executive authority and the extension of tax cuts, and finally tariffs, which was largely the path he took in his first presidency, and would not expect economic headwinds from trade policy to be experienced in the early stages of a Trump presidency.
UBS believes the highly regulated Financials group would benefit most from a Trump victory on stronger nominal GDP, increased M&A, and a steeper yield curve, while the firm says Tech is "neither economically sensitive, nor highly regulated," and is not particularly sensitive to election outcomes.
Publicly traded companies in the Financials space include Bank of America (BAC), Citi (C), Goldman Sachs (GS), JPMorgan (JPM), Morgan Stanley (MS), U.S. Bancorp (USB) and Wells Fargo (WFC). Publicly traded companies in the Tech space include Apple (AAPL), Amazon (AMZN), Alphabet (GOOGL), Netflix (NFLX), and Meta (META).
HARRIS' ADVISERS LOOK TO 'RESET' RELATIONS WITH CRYPTO INDUSTRY: Kamala Harris' advisers have approached top crypto companies, including Coinbase (COIN), Circle and Ripple Labs, to "reset" relations with the industry, The Financial Times' George Hammond, James Fontanella-Khan and James Politi reported on Monday. According to four people familiar with the matter, members of the Harris' team have contacted people close to crypto companies about meeting in recent days as rival Donald Trump enjoys strong levels of support from the sector. Crypto groups will probably be an important source of funding for candidates in the election, the report notes, adding that the decision to reconnect with the crypto industry had little to do with attracting new electoral contributions and that the goal was instead to build a constructive relationship that would ultimately set a smart regulatory framework that would help the growth of the entire asset class.
