Equities week ahead forecast: US election stocks & sectors to watch

With just days to go until the November 5th presidential election, the official polls are still very tight although Kamala Harris appears to have tipped ahead this weekend. However, the markets have been following prediction markets such as Predict and Poly market, which points to a Trump victory, albeit narrowing odds of a Trump victory.

The S&P 500 eased back from its record high reached in October amid de-risking ahead of the election this week. Here we consider which sectors and stocks may perform well in a Trump versus Harris victory.

So, which stocks could rise should Trump return to power?

Trump's pledge to reduce corporation tax and ease regulation is expected to boost the markets in the case of a trump victory.

U.S. banks will likely benefit from a Republican swift thanks to improved domestic investment, looser regulation, and tax cuts. Equities stocks such as JP Morgan, Bank of America, and Wells Fargo could be in demand, particularly after encouraging Q3 results.

Meanwhile, M&A could also benefit from more lenient regulation enforcement, meaning that Goldman Sachs and Morgan Stanley could also benefit.

Automotive: The auto sector, which has a strong exposure to the domestic market, could perform well under Trump. This includes stocks such as Ford and General Motors. In the EV sector, Tesla could rise following solid support from Elon Musk for Trump's election campaign.

Crypto stocks Trump has shown himself to be the pro-crypto candidate across the campaign, helping to boost Bitcoin to within just a few $100.00 of its previous record high. As a result, crypto stocks have risen. Under a Trump presidency, crypto stocks could continue to move higher. MicroStrategy, but digital riot platforms could benefit.

Energy Trump supports fossil fuel industries, which could benefit oil and gas majors. He would likely pursue policies favoring domestic energy production, which could benefit companies such as Chevron and Exxon Mobil, which booked gains on Friday after upbeat results.

Trump-related stocks, such as Trump Media and Technology, in which Trump is a majority state shareholder, stand to gain if he wins further.

What could a Kamala Harris victory mean for sectors & stocks?

Kamal Harris’ plans to increase taxes on capital gains, stock buybacks, and corporate earnings could unnerve investors and increase corporate costs, which could result in some weakness. That said, a Harris victory with a Republican could result in a gridlock that could keep the bull market happy.

Homebuilders Harris has pledged to build more homes and reduce costs for renters and homebuyers through tax incentives and a lower interest rate environment. The administration could benefit stocks such as KB Home and Lennar.

Harris has focused on healthcare and pledged to cut costs in the sector by implementing caps on prescription drugs. This could hurt profit margins at pharma giants like Eli Lilly and Pfizer.

Green energy has been an area that Harris has also shown keen support for and is likely to offer increase incentives and supportive policies as well as regulation. While Trump has pledged to withdraw from the Paris Agreement Harris has said she aims to align with the agreement of reducing pollution by 2035

Infrastructure stocks could also benefit from a Kamala Harris victory as she has signaled a likely increase in federal infrastructure spending focusing on green energy transportation and broadband expansion. This could include stocks such as Nucor and Caterpillar.