SA Asks: Which consumer stocks could rise or fall on a Trump win?
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With the U.S. presidential election just days away, speculation has been heating up about how a Trump or Harris win could impact stocks in specific sectors.
For today’s SA Asks question, we asked our analysts which consumer stocks they thought could rise or fall on a Trump win.
Seeking Alpha analysts Justin Purohit, Rob Isbitts of Sungarden Investment Publishing, and Manika Premsingh, Investing Group Leader for Green Growth Giants, gave us their thoughts on the topic.
Justin Purohit: A Trump victory could lead to reduced scrutiny of corporate pricing practices and an uptick in media consumption. This environment may benefit the stocks of food companies and retailers, like PepsiCo (NASDAQ:PEP) and Mondelez International (NASDAQ:MDLZ), which have faced criticism for their pricing strategies. Additionally, publishers such as The New York Times (NYSE:NYT) and other media organizations could see a surge in subscriptions driven by an anticipated increase in investigative reporting.
Rob Isbitts: The obvious one would be Tesla (NASDAQ:TSLA), given the relationship that has developed between Elon Musk and the 45th President. There was a time when Trump was less enthusiastic about electric vehicles, but that’s no longer the case. I’d also be looking at companies like Walmart (NYSE:WMT) and Target (NYSE:TGT), since a Trump win could energize the mid-lower budget consumer.
Manika Premsingh: A Trump win would mean making permanent the provisions of the Trump Tax Cuts and Jobs Act, which will benefit individuals. The act lowered tax rates across the board and the provisions that are due to end next year otherwise. This could sustain consumer spending going forward, and, given the support to taxpayers across the income spectrum, encourage luxury stocks, which have witnessed slowing demand in the past year. Stocks like LVMH (OTCPK:LVMUY) (OTCPK:LVMHF) and Richemont (OTCPK:CFRUY) could be gainers.
On the other hand, his hard stance on China risks retaliation that could impact consumer stocks that have significant interests in the market. From Starbucks (NASDAQ:SBUX) to Nike (NYSE:NKE), plenty of US companies have an appreciable presence in China. While industries like agriculture and automotive have borne the brunt of Chinese responses in the past, there’s no ruling out any further negative impacts.