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, Wolfe put out its election night guide for investors, while Raymond James said fiscal tailwinds and the continuation of tech restrictions will occur regardless of the election outcome.
UPSIDE FOR CHENIERE EITHER WAY: In a research note to investors on Monday, BofA took a look at how LNG-related stocks would trade in a Trump win vs. a Harris win. The firm said Trump has said that he would lift the indefinite ban on LNG export permits to non-free trade agreement countries, and it's likely that he would expedite permitting approvals, and while Harris has not commented explicitly on her LNG permit ban plans, most believe she would follow the President Biden's path of lifting the ban after the environmental review is complete in 2025, and that there would be more environmental scrutiny in the future to get a permit. Should Trump win, Cheniere (LNG) will be up, though other "higher beta" LNG operators like Energy Transfer LP (ET) could be up more, BofA said. The ban being lifted immediately will likely be taken positively, and adding in Sabine Pass expansion, it would add $15/share to its valuation, the firm said. In a Harris win, the firm would be a buyer for the longer-term, which will be slower moving but could potentially provide even more upside than $15/share, BofA said.
ELECTION NIGHT GUIDE: Wolfe Research was out with an election night guide for investors. The firm said it sees Trump as "at least a 55% favorite" and that figure could possibly move higher. Under a Trump victory, the firm says tariff escalations would pressure input costs, hurt global exports, and be a drag on China-exposed stocks, while under a Harris election, the firm sees "status quo" on most tariffs, with targeted export restrictions on strategic Chinese sectors. Wolfe would also expect Harris to implement IRA rules, including the transition to tighter Chinese content rules and to implement and defend emissions rules on autos and power plants. The firm sees modestly higher U.S. base defense spending growth under a Trump victory and base spending caps offset by more Ukraine aid under a Harris election. In healthcare, under Trump, ACA tax credits would be expected to expire with risks to Medicaid costs, though the firm expects "more generous" Medicare Advantage rate proposals and "less aggressive" IRA drug price negotiation offers. Under a Harris win, the firm expects no Medicaid cuts, status quo on MA rates and other CMS policy and IRA drug price negotiation offers. In financials, the firm expects Trump would withdraw proposals on bank capital, nonbank SIFIs, credit card late fees, and other new SEC rules, as well as a ease the regulatory crackdown on crypto, while Harris would finalize, defend and start enforcing rules on bank capital and complete any non-bank SIFI designations with "some" moderation of anti-crypto postures.
Publicly traded companies in the financial 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 fossil fuels space include BP (BP), ExxonMobil (XOM), Chevron (CVX), Halliburton (HAL), Devon Energy (DVN), Shell (SHEL), EQT (EQT), ConocoPhillips (COP), Duke Energy (DUK), and Occidental (OXY). Publicly traded electric vehicle makers include Tesla (TSLA), Rivian (RIVN), General Motors (GM), Lucid Group (LCID), Nio (NIO), Li Auto (LI), and Xpeng (XPEV). Publicly traded companies in the healthcare space include Cigna (CI), CVS Health (CVS), Humana (HUM), Centene (CNC), UnitedHealth (UNH), Alignment Healthcare (ALHC), Elevance Health (ELV), and Molina Healthcare (MOH).
RAYMOND JAMES: Strong fiscal tailwinds, less regulation, energy permitting reform, and the continuation of tech restrictions will occur regardless of the election outcome, Raymond James told investors in a research note. Assuming the passage of a tax package, the firm said that the tax debate will likely result in an increase to the child tax credit and the restoration of business-friendly provisions, such as the full domestic R&D tax credit and bonus depreciation. The firm noted that more than 75% of the Biden-era funding for infrastructure, semiconductor production, and the energy transition remains unspent through the end of September and many of the tax credits under programs authorized by the Inflation Reduction Act have almost eight years remaining. While there may be attempts to repeal portions of the IRA in a Trump victory, the firm remains skeptical, and Raymond James expects to see a strong fiscal tailwind to the economy regardless of the outcome of the election. The firm also views U.S. and NATO defense budgets as likely to increase, regardless of the outcome of the election. In a Trump administration, the firm expects strong support to increase defense spending, while the heightened global threat environment would keep Harris promoting robust defense budgets, Raymond James said.
Publicly traded defense companies include L3Harris (LHX), Lockheed Martin (LMT), Northrop Grumman (NOC), RTX (RTX), General Dynamics (GD), Boeing (BA), Honeywell (HON), and Huntington Ingalls (HII).
AUTO INDUSTRY: Michigan and the automotive industry remain critical to the presidential election, and auto executives and lobbyists told CNBC that they're preparing for all outcomes in the election, with electric vehicles, trade, tariffs, China, emissions regulations and labor serving as top issues. Officials expect a Harris victory to be a continuation, but not a copy, of the past four years under President Joe Biden, while they think Trump would likely return to policies and actions from his first presidential term, CNBC said. Automakers, suppliers and other auto-related companies are preparing for both outcomes as well as a split in Congress, insiders said. Some speculate that legacy automakers GM (GM), Ford (F), and Stellantis (STLA) would benefit the most with Trump and Republican control of Congress, while EV startups like Rivian (RIVN) and Lucid (LCID) would benefit more with a Democratic win, largely due to expected plans involving EVs and fuel economy requirements.
JOHNSON PLEDGES ACA REFORM: House Speaker Mike Johnson pledged "massive reform" of the Affordable Care Act if Donald Trump is elected president, reopening a politically sensitive policy issue for Republicans a week before Election Day. "Health-care reform's going to be a big part of the agenda," Johnson said, adding that a caucus of Republican physicians has shared proposals with him and that GOP leaders hope "to take a blowtorch to the regulatory state" and "fix things." The law, which Democrats enacted in 2010, provides health coverage to tens of millions and has been a frequent target of GOP repeal efforts.
'DIFFICULT' COMPS: New Street downgraded Trade Desk (TTD) to Sell from Neutral with an unchanged price target of $86. Enthusiasm for the stock is "understandable" as smaller walled gardens continue giving Trade Desk more access to their premium inventory and the company's top competitor, Google's (GOOGL) DV 360, continues to give share according to all of the firm's recent industry conversations, the analyst said, adding that "there's no change to our view that TTD is best-in-class for vision, strategy and execution." The challenge, however, is 2025 as consensus implies about 30% core spend growth excluding political, up from 19% in 2024. The firm believes that core spend growth can accelerate in 2025, just not to the level that consensus implies, arguing that 2025 consensus is not properly reflecting the difficult comps that will follow the U.S. election.
AMAZON: In August, Amazon CEO Andy Jassy called Trump to outline Amazon's (AMZN) plans, and Trump said Amazon should cut him a large check for his presidential efforts, The Washington Post reported, citing sources.
TRUMP MEDIA: Trump Media & Technology Group (DJT) is now valued at over $10B after its shares more than quadrupled since late September. On Tuesday, the stock was moving so sharply that trading was briefly halted several times during the morning. The stock had dropped to roughly $12 late last month. Over the past six weeks, the stock is up more than 300%. In a report on Tuesday, market research firm S3 Partners said the rise in Trump Media's stock closely mirrored Trump's odds in prediction and betting markets, which have increasingly shifted toward expecting victory for Trump, which would benefit Truth Social. Shares of Trump Media dropped more than 22% Wednesday, however.
Trump, who owns nearly 57% of the company, according to recent regulatory filings, has vowed not to sell his shares.
Cheniere Energy
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Energy Transfer LP
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Bank of America
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Citi
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Goldman Sachs
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JPMorgan
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Morgan Stanley
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BP
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Chevron
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Halliburton
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Devon Energy
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Shell
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EQT Corporation
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ConocoPhillips
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Duke Energy
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Occidental Petroleum
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Tesla
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Rivian Automotive
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General Motors
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Lucid Group
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Nio
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Li Auto
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XPeng
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Cigna
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CVS Health
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Humana
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Centene
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UnitedHealth
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Alignment Healthcare
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Elevance Health
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Molina Healthcare
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L3Harris Technologies
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Lockheed Martin
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RTX
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General Dynamics
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Boeing
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Honeywell
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HII
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Ford
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Amazon.com
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Trump Media
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Alphabet
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