The election of the President of the United States give private investors a good chance to earn. What stocks to buy in the event of victory trump or Clinton?
photo: Gennady Cherkasov
According to analysts, the four-year cycles occur not only in American politics but also on the stock market. Typically, most indices suffer losses in the first two years of the presidential term. Bullish trend is generally gaining strength in the second half of the presidential cycle: the authorities try to stimulate the economy to create a fertile ground for a candidate from the ruling party.
According to The Stock Trader’s Almanac, since 1833 the U.S. stock market has gained an average of 10.4% a year before the presidential elections, and almost 6% in the election year, while in the first and second years of the presidential term, the market grew by 2.5% and 4.2%, respectively.
However, the current cycle President Obama is breaking with tradition. In the first year of the second term of his reign, in 2013, the Dow Jones index showed an increase (27%), and in 2014 the index rose another 7.5%. But in the past, 2015, which, if you believe the statistics, had become the strongest of the series, Dow Jones not what is not increased, but even decreased by 2%. This year opened with a significant drop, but then the market started to steadily set record highs in all three major indexes: Dow Jones, S&P500 and NASDAQ. The dynamics of such a typical do not carry. The specialists have the impression that the stock market wants to tell the investors that not all is quiet in the Danish Kingdom.
“Right now, most investors believe that the election will win in the US Clinton, so in case of victory of the Democrats we will see profit taking on long positions “in fact”. World stock markets decline slightly. The victory trump will mean growth of uncertainty in the markets, which will automatically lead to a rise in gold prices and shares of gold mining companies — said the Deputy Director of intestinalis IR “Zerich capital Management” Andrey Vernikov. In his opinion, the victory trump may lead to trade wars between the US and China, which in the future will be forced to reduce oil consumption. The price of “black gold” in this case, in the long term will fall, which will make the shares of Russian oil companies unattractive for investment.
A number of experts agree that the Clinton presidency will be a Golden time for three industries: defense industry, online retail and green energy. It is expected that Hillary will be a tougher politician in the international arena than Barack Obama, and that means the U.S. will continue to wage wars in different parts of the world. Among the “military” stock analysts have identified a paper Lockheed Martin and Northrop Grumman — the major producers of combat aircraft.
The beneficiaries of the victory, Clinton will also be the providers of the robots and the leaders in the automation of business processes. The nominee of the democratic party is in favour of raising the minimum wage from $7.25 to $12 per hour. As a result, enterprises will begin to replace low-skilled workers in warehouses and office clerks robots. “It is particularly attractive to investors in the event of victory, Clinton is the Amazon.com” — says Mikhail Aristakesyan, head of Department of analysis of global markets THEIR “Finam”. He recalled that this online retail has been using robots instead of humans in their warehouses. “Measures to reduce staff costs taken in advance,” — said the analyst.
Big plans for Clinton and against solar energy: by 2027 it intends to achieve this production of “clean” electricity, which would be enough for all the houses in the country. According to Aristakesyan, among representatives of the solar sector from the election, Clinton will benefit First Solar. In recent years this producer of solar panels have improved technology, but retained a high potential for growth stocks.
Campaign platform Hillary is built on the promise of comprehensive care to ordinary Americans. Guards one her campaign generously funded by big banks and hedge funds: Citigroup, Goldman Sachs, JPMorgan, Soros Fund Management, etc.
The economic program of the candidate in presidents of the United States Donald trump is called shock therapy, which is completely focused on domestic demand and consumption rather than globalization. The slogan for his campaign, the billionaire has chosen the slogan “we will Return America to its former greatness!”. Central to his program — tax cuts for business and middle class. Trump believes that because of high taxes the production of goods inside the country unprofitable, therefore it is proposed to reduce the tax on profits of U.S. companies from 35% to 15% and to introduce a preferential tax of 10% on the expense of the us corporations that will be returned from abroad.
In case of victory of the candidate from the Republican party, also in the black will be the coal company. Trump promises to re-open the mine, to give work to people, and generally help the industry. So, the price will rise stocks coal mining company Consol Energy, which also has a gas business. According to experts, another favorite of General Motors with a market capitalization of $50 billion In case of a victory of Donald trump, who promised to revive the American auto industry, the company probably will be new incentives that will improve financial performance.
“Both candidates for U.S. President in his campaign speeches willing to speak about the intention to develop the country’s infrastructure. Many roads, interchanges, airports were built during the great depression and obsolete. To minimize the risks, private investors should buy shares in construction companies”, — said Mikhail Aristakesyan.
In his view, the best prospect now is Jacobs Engineering Group (market capitalization currently of $6,53 billion, more than 64 thousand employees). It is undervalued on comparative coefficients, thus occupies a leading position on the market. “In case of victory of any candidate on paper this company will be increased demand. Despite the fact that now the American market is close to the maximum values of the company’s growth potential is 20-25%”, — concluded the analyst.