Barclays highlights 18 stocks that would be resilient in potential economic downturn 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, Vice President Kamala Harris vows to help grow investment in AI and crypto, while former President Donald Trump threatens tariffs. Wolfe Research recommended investors "take tariff risks seriously."
CRYPTO AND AI INVESTMENT: Vice President Kamala Harris vowed to help grow investment in AI and crypto if elected, Jennifer Epstein of Bloomberg reported. Harris said, "We will partner together to invest in America's competitiveness, to invest in America's future. We will encourage innovative technologies like AI and digital assets, while protecting our consumers and investors." This marked the first time Harris has commented on cryptocurrencies as the Democratic presidential nominee and as the crypto industry has emerged as a significant player in the 2024 presidential election. Meanwhile, former President Donald Trump has openly courted the industry, pledging to fire SEC Chair Gary Gensler, whose term is not up until 2026, pick regulators friendly to the industry and create a stablecoin framework. Last week, Trump paid for burgers with Bitcoin at a crypto-themed bar in New York City.
Publicly traded companies in the crypto space include Bit Digital (BTBT), Coinbase (COIN), Core Scientific (CORZ), Greenidge Generation (GREE), Marathon Digital (MARA), MicroStrategy (MSTR), Riot Platforms (RIOT), Stronghold Digital (SDIG) TeraWulf (WULF), Block (SQ), Mawson Infrastructure (MIGI), and Iris Energy (IREN).
TARIFFS: At a policy roundtable in Smithton, Pennsylvania on Monday hosted by the Protecting America Initiative, former President Donald Trump said, "They've announced a few days ago that they're going to move a lot of their manufacturing business to Mexico. I'm just notifying John Deere right now: If you do that, we're putting a 200% tariff on everything that you want to sell into the United States." Meanwhile, while speaking during a campaign stop in Savannah, Georgia, Trump stated: "We will put a 100% tariff on every single car coming across the Mexican border." Publicly traded automakers include Ford (F), General Motors (GM), Honda (HMC), Mercedes-Benz (MBGYY), Nissan (NSANY), Stellantis (STLA), Tesla (TSLA), Toyota (TM) and Volkswagen (VWAGY).
On Wednesday, Harris gave an economic policy speech of her own in Pittsburgh, accompanied by the release of an 82-page booklet laying out her economic plans. Wolfe noted that Harris pledged to be pragmatic rather than ideological on economic policy, and that she understands she will probably need bipartisan deals on fiscal policy. She also rolled out a few new proposals, most notably on industrial policy, where she called for targeted tax credits for several industries including clean energy, AI, data centers, biomanufacturing, aerospace, and clean iron and steel. Though back in 2019, Harris called for tough emissions standards for automakers which would have required new vehicles to emit zero emissions by 2035, in recent weeks, however, she has backed away from that stance as consumer demand for electric cars lessens and pressure on the issue from Trump heats back up, Ken Thomas and Sean McLain of The Wall Street Journal reported. The competing pitches to members of the United Auto Workers, their retirees and communities throughout Michigan are at the forefront of Trump and Harris's fight for the state's 15 electoral votes.
In terms of what these policy plans mean for markets, Wolfe Research said that if Trump wins, he will have the power to do much of what he is proposing, whereas even if Harris wins, she likely will not. Wolfe Research recommended investors "take tariff risks seriously," with this week's speech "underscoring yet again that Trump is sincerely committed to the use of tariffs as an economic tool" and that he seems "totally unconcerned about the downsides." The firm does not see him as likely to back off these proposals in 2025 based on warnings about the inflationary impact or market reaction.
BARCLAYS' PICKS: Barclays last week presented 18 picks that stand to benefit from a Trump victory and 13 likely to benefit from a Harris victory. The firm also highlighted 18 stocks that are resilient in a potential economic downturn. The firm feels that a second Trump presidency would likely see a new global trade war, as the former president has promised blanket tariffs of 10% on all U.S. imports and 50%-60% tariffs on Chinese goods, while a Harris presidency, would likely see most of its legislative proposals hindered, with far less dramatic policy changes.
The 18 Overweight-rated stocks that the firm's analysts view as resilient in a potential recession or economic downturn are: Axon Enterprise (AXON), AZEK (AZEK), Bunge (BG), Canadian Pacific Kansas City (CP), Deere (DE), Encompass Health (EHC), Flutter Entertainment (FLUT), TechnipFMC (FTI), Linde Plc (LIN), McDonald's (MCD), McKesson (MCK), Nutanix (NTNX), Oracle (ORCL), Atlassian (TEAM), TJX (TJX), Visa (V), Verisk Analytics (VRSK), and Zoetis (ZTS).
Barclays' Overweight-rated names that it believes are best-positioned to benefit from a Trump election victory are Becton Dickinson (BDX), Baker Hughes (BKR), Cummins (CMI), Five9 (FIVN), Flex (FLEX), Goldman Sachs (GS), HealthEquity (HQY), Intuit (INTU), L3Harris (LHX), Mohawk Industries (MHK), 3M (MMM), Ralph Lauren (RL), UnitedHealth (UNH), Union Pacific (UNP), Wyndham Hotels (WH), and Wix.com (WIX).
Meanwhile, the Overweight-rated stocks Barclays believes are best-positioned to benefit from a Harris election victory are Burlington Stores (BURL), Carrier Global (CARR), CF Industries (CF), Centene (CNC), D.R. Horton (DHI), Intuitive Surgical (ISRG), Knight-Swift (KNX), Leidos Holdings (LDOS), Las Vegas Sands (LVS), Monday.com (MNDY), MasTec (MTZ), Progyny (PGNY), and U.S. Bancorp (USB).
ARBITRATION BOARD APPROVES U.S. STEEL DEAL: U.S. Steel (X) said on Wednesday the board of arbitration, jointly selected by the steelmaker and the United Steelworkers union to settle disputes between them, ruled in favor of Nippon Steel's (NPSCY) $14.9B buyout deal. The arbitration board ruled that U.S. Steel has satisfied each of the conditions of the successorship clause of its basic labor agreement with the USW, the company said. Harris previously voiced her opposition to Nippon Steel's pending purchase of U.S. Steel saying at an event in Pittsburgh that U.S. Steel should remain domestically owned and operated. The deal has become an issue in the U.S. presidential race because U.S. Steel is headquartered in Pittsburgh, Pennsylvania, a critical swing state.
TRUMP MEDIA INSIDER FILING DEADLINE: Inside shareholders of Trump Media (DJT) were allowed to start selling their shares this past Friday, the end of the traditional six-month lockup period after the stock's debut in March, and Tuesday marked the end of the two-day requirement for stock sales to be disclosed if any company executive or insiders decided to sell their shares. Donald Trump, the largest shareholder in Trump Media with a stake that represents nearly 60% of the company's outstanding stock, said earlier this month that he didn't plan to sell any of his shares of the parent of Truth Social.
Andrew Litinsky's United Atlantic Ventures disclosed a 0% stake in Trump Media & Technology Group. United Atlantic sold its over 7.5M share stake in the company.
