Clinton’s proposals could be a headwind to energy in the form of higher taxation and increased regulations, Gregory said. Coal infrastructure projects could see more shutdowns, pipelines could face more scrutiny and exploration and production companies could be hurt by her anti-fracking positions. She may continue President Barack Obama’s support of subsidized solar and wind, boding well for renewable-energy companies.
Her opponent, meanwhile, “is a supporter of conventional energy, and a perception of relief from a Clinton policy is a neutral-to-positive for fundamentals and sentiment,” Gregory said. Trump “has not embraced the subsidies and full-scale federal support for wind and solar, and has made comments to the effect that wind turbines are an environmental and aesthetic disaster.”
Consumer Staples
Among the losers under Trump would be consumer staples, according to Highland.
Trump has proposed a 45 percent tax on Chinese imports and a 35 percent tax on Mexican autos and parts. Gregory said such tariffs would disrupt the global supply chain, not unlike the 10 percent import surcharge of the 1971 “Nixon shock” and the 2002 steel tariff imposed by President George W. Bush. Trump’s proposals may hinder international sales of consumer staples as companies raise prices to maintain margins in the face of increasing costs of goods sold, according to Gregory.
The sector could stand to benefit under Clinton, given her “benign global trade policy and lack of tariffs,” Gregory said. She may be viewed as a relief from the kinds of measures Trump is proposing, making her moderately favorable for the sector, according to Gregory. However, that may be subdued by Clinton’s opposition to the 12-nation Trans-Pacific Partnership agreement, he said.
Health Care
Health care is “probably the most needle-sensitive to the election,” Gregory said.
Clinton would seek to expand access to the Affordable Care Act, which would be a lift for hospitals, health-care facilities, Medicaid and Medicare managed-care organizations, physician practice managers and so-called biosimilar drugmakers, Gregory said. Her “focus on individual affordability will ensure broad and cost-effective access to health care,” he said, pointing to Clinton’s support of insurance tax credits and a cap on premiums and deductibles. She also favors expanding Medicaid.
Trump has said he will ask Congress to repeal the act, known as Obamacare, on his first day in office. That would result in a lower utilization of health-care facilities and more people without insurance, Gregory said. Health-care services would face lower margins and a constrained ability to generate cash flow, he said, adding that any actual functional change to Obamacare is limited and Trump’s policies would be more of a “rebranding exercise” that could cause “temporary valuation destruction.”