'Trump Trade' vs. 'Harris Trade': How They Could Shape Your Portfolio

The 2024 U.S. presidential race between former President Donald Trump and current Vice President Kamala Harris is still "incredibly close," according to the latest New York Times survey. As investors await the outcome of the November election, equity analysts are busy parsing through the candidates' pronouncements for clues on which stocks could benefit from their policies.

Jefferies analysts cited 10 possible policies that Trump might implement if he wins the next election and how these could affect stocks. Their analysis was based on Trump's Agenda 47 proposals, and the 220 executive orders from his first term, along with insights from Jefferies' policy experts.

The analysts also reviewed Harris's recent statements and the 2024 Democratic Platform as they examined the impact on stocks.

Immigration: Analysts predict that Trump might stop the benefits for undocumented immigrants and increase deportations and detentions, while reducing access to public housing, food stamps, healthcare, and citizenship for their children and increasing companies' capital spending on equipment.

Trade and Tariffs: Analysts think Trump could have a major impact on tech companies. He has expressed support for tax cuts, including extending the lower rates he introduced during his presidency. He also wants to lower corporate tax rates further.

Meanwhile, Jefferies expects Trump to match U.S. tariff rates imposed by its trading partners, possibly applying a 10% tariff across the board and up to 60% on Chinese products.

Executive Order: Analysts also note that Trump plans to restore an executive order requiring the removal of two existing regulations for every new regulation introduced, which would further weaken federal agency authority.

Electric Vehicle Standards: In addition, Trump will likely repeal the EPA's electric vehicle standards, which require 56% of new vehicle sales to be electric by 2032. Electric vehicle credits from the Inflation Reduction Act are also expected to be canceled.

Drug Pricing and Domestic Manufacturing: Another possible Trump policy is lowering drug prices and expanding domestic production of essential drugs, which could probably benefit Amphastar Pharmaceuticals and Teva Pharmaceutical Industries. Merck & Co, Regeneron Pharmaceuticals and Bristol-Myers Squibb, are seen benefiting from a more lenient IRA implementation, while Vertex Pharmaceuticals could be mostly excluded from negotiation scenarios on drug pricing. On the other hand, BioCryst Pharmaceuticals could be negatively impacted because it sells the most expensive oral drugs under Jefferies' coverage.

Foreign Policy: Analysts note that Trump plans to end Russia's war against Ukraine, although Agenda 47 does not provide specific details.

Government Budget: On government restructuring, Trump is expected to order federal agencies find ways to cut their budgets. This could lead to the revival of the 1974 Impoundment Control Act, which lets Congress remove extra funding.

Education Policy: Trump could also try to transfer education authority from the Department of Education to state governments, arguing that states are better suited to create education policies based on community needs.

Workforce: Restoring Schedule F appointments, which convert civil officers into politically appointed positions, and eliminating equity policies in federal agencies are also on Trump's agenda, and this could impact contractors.

Free Speech: Finally, Trump plans to ban censorship of speech, continuing his administration's efforts to promote freedom of speech and religion by restricting promotion, marketing, and financial support for online platforms that censor content.

Harris's entry into the presidential race to replace current President Joe Biden boosted the odds for a Democratic victory in the race. Jefferies strategists say that if she wins the presidential election, the focus will be on taxes, regulations, industry policy, trade, and energy transition.

Antitrust and hidden fees: The current administration, under which Harris is serving as vice president, has stressed its commitment to stronger antitrust enforcement beyond Big Tech, including hospitals, insurance, pharmaceuticals, food and media, according to Jefferies. The leadership has also implemented regulations to reduce hidden fees, which the analysts expect, could continue under a Harris administration, should she win the presidential race, according to the analysts' note.

Food Price: Harris might introduce new rules and penalties to prevent food and grocery companies from raising prices too much to boost profit margins.

Drug Cost: Jefferies strategists said Harris could move to cut drug costs by requiring pricing transparency from pharmacy benefit managers (PBMs) =.

Tax Plan: Harris has proposed restoring the top individual income tax rate to 39.6% for single filers earning over $400,000 and joint filers earning over $450,000. This would reverse the 2017 Tax Cuts and Jobs Act and could impact high earners.

Supply Chain: In addition, Harris might reduce reliance on critical materials and technologies from China and focus on reshoring supply chains from friendly neighboring countries, while promoting restrictions on the export of advanced technologies.

Climate Policy: Harris is seen pursuing the electrification of the federal fleet and other heavy-duty vehicles, including school buses and transit buses, benefiting producers of metals and minerals that power electric batteries.

At the same time, she may require the use of low-carbon materials and clean power in all new federal buildings by 2030.