
Evercore’s Top Strategies for a Harris/Blue Sweep
Investing.com – Evercore ISI has reevaluated the US equity market as the November presidential election approaches, following President Joe Biden’s decision to let Vice President Kamala Harris spearhead the Democratic Party’s campaign.
The recent unsuccessful assassination attempt on Republican candidate Donald Trump highlights the political uncertainty surrounding this historically competitive presidential race.
From a policy standpoint, while Harris’ elevation to lead the Democratic ticket has made the election polls closer and the race more unpredictable, Evercore ISI is maintaining its previous predictions regarding sector winners and losers for possible Harris and Trump victories, as there have not been significant changes in policy.
Historically, a united government tends to yield better stock market performance than a divided one. Nevertheless, the current sharp partisan divides suggest that in 2025, stock performance may be better if the government remains divided.
If a Harris-led Democratic sweep occurs, Evercore ISI predicts that sectors like renewables and electric vehicles will likely benefit, as a Harris administration would continue to advance the Inflation Reduction Act and other clean energy initiatives. Health insurers leveraged by the Affordable Care Act and Medicaid could also find support due to ongoing efforts to increase enrollment in these programs.
Conversely, potential losers under Harris include sectors facing continued regulatory pressures from the Biden administration, such as financial services, utilities dependent on gas and coal, prescription drugs, and insurers that rely on Medicare Advantage.
It’s important to note that a Harris administration would largely represent a continuation of existing policies, and the increasing scrutiny of executive actions by federal courts may limit the extent of regulatory impacts.
Since Harris’s ascension to the top of the Democratic ticket, two of her policy proposals have garnered attention. However, their potential significance remains uncertain. First, she advocated for Congress to enact a federal ban on “price gouging” in the grocery sector, yet specifics on this proposal are lacking. Second, to fund her housing and “Care/Opportunity Economy” initiatives, she supports many of Biden’s proposed tax increases, including higher taxes on corporations and wealthy individuals, though she would propose a lower capital gains tax increase than Biden suggested.
Implementing Harris’s proposals would require legislative action, which Evercore ISI estimates would only be feasible in a scenario where Democrats sweep the elections—a situation it currently views as having a 10% likelihood, given the favorable landscape for Republicans in the 2024 Senate races.