With election day upon us, it seems the entire market is tuned in to who will be the next president: Hillary Clinton or Donald Trump.
Jonathan Golub, chief equity strategist at RBC Capital Markets, noted that market moves including the tightening of polls and the FBI ending its investigation into Clinton’s emails have given a strong indication of how markets will move post-election.
In short, the market seems to be pricing in a Clinton win. Therefore, in the event of a Trump victory, there could be a sell-off in the markets.
“The events of the last two weeks provide investors with an excellent preview of how the market might respond to the outcome of today’s election,” wrote Golub in a note to clients on Tuesday.
“More specifically, the moves in stocks, currencies, commodities, and rates in response to FBI Director Comey’s two letters to Congress show how global markets are likely to react to either a Clinton or Trump electoral victory.”
Golub broke down how markets were moving on these election events and identified a few companies that may see their stocks benefit the most, at least in the short-term, for either a Clinton or Trump win.
On the Clinton side, Golub said that companies exposed to the Affordable Care Act could be winners. Clinton is a supporter of the ACA, while Trump wants to repeal the law. The strategist specifically cited HCA Holdings, an operator of health care facilities, and Universal Health Services, one of the largest US hospital management companies.
Outside of healthcare, Golub said that a Clinton victory would be good news for companies that are heavily exposed to international trade.
On his list is Kansas City Southern, which is perhaps the most intriguing. The rail line operates the railroads between the US and Mexico and given Trump’s scepticism of trade with Mexico, a Clinton victory would be good news for the firm.
Also on the global trade list was Owens-Illinois, a large packaging products firm.
Trump victory beneficiaries, according to Golub, included drug companies. Clinton has said that she plans to combat high drug prices, so for pharmaceutical companies that could be a drag.
“Drug Pricing companies under scrutiny for prices increases, such as Alexion, would benefit,” wrote Golub.
Additionally, gold stocks would benefit if Trump wins according to Golub, with prices of the precious metal generally climbing in sync with the odds of a Republican presidential election win. The analyst specifically cited Newmont Mining Corporation as a possible winner.
While the long-term impact on these stocks may not be as clear, there may be some good news for half of these companies on Tuesday night.
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