Beautiful Virgin Islands

Sunday, Jul 06, 2025

Wall Street is busy trying to figure out how to profit from a Biden presidency

Wall Street is busy trying to figure out how to profit from a Biden presidency

Joe Biden will be the 46th president of the United States -- and Wall Street is busy trying to figure out how to profit from that.

Monday's big market rally likely had more to do with the reported efficacy of the Covid-19 vaccine that Pfizer (PFE) and BioNTech (BNTX) are working on than Biden's victory.

But market strategists say investors need to start preparing for how a Biden presidency will impact certain sectors.

Infrastructure and solar set to shine


Solar companies and other leaders in the alternative energy industry are poised to be among the bigger beneficiaries of a Biden White House, but that potential windfall may already be priced into the stocks.

The Invesco Solar ETF (TAN) -- which trades under the appropriate ticker symbol TAN -- surged nearly 40% in the past three months on anticipation of a Biden win but has pulled back so far this week. The ETF owns big positions in SolarEdge Technologies (SEDG), First Solar (FSLR) and Sunrun (RUN).

Investors are also betting (and you've likely heard this before) that there will finally be a renewed focus in Washington on passing a big infrastructure spending bill.

There were hopes that the Trump administration would make infrastructure improvements one of its economic priorities, but that never happened. However the need to upgrade highways, railroads and bridges is even more pressing now given the jobs crisis brought on by the pandemic.

The Global X U.S. Infrastructure Development ETF (PAVE) has rallied this week and is up more than 15% over the past three months.

The fund owns stocks such as building supplies manufacturer Fastenal (FAST), construction software firm Trimble (TRMB), power management company Eaton (ETN) and the big railroads CSX (CSX), Union Pacific (UNP), Norfolk Southern (NSC) and Kansas City Southern (KSU).

Experts also point to the fact that Biden, as vice president under Barack Obama, has experience helping the economy recover from a recession.

"Investors should take some solace in the notion that Biden will be in somewhat familiar waters as he begins his Presidency," said Jeff Schulze, investment strategist at ClearBridge Investments, in a report. "As Vice President, Biden took office in the midst of the global financial crisis and helped steer the economy back into an expansion characterized by steady but slow economic growth."

Funds focusing on environmental, social and governance (ESG) issues have also rallied in the past few weeks on expectations of a Biden win. The ESG wave is even impacting the fixed income market. State Street launched a new ESG-focused ETF dedicated to corporate bonds on Tuesday.

Cannabis stocks have also surged as hopes increase for federal decriminalization of recreational marijuana.

The new regime in Washington may also have an impact on the market beyond specific industries and sectors.

Value over growth


Biden's win could usher in a change in the types of investments that drive the overall market. Value stocks may once again thrive while tech and other high growth stocks finally see a slowdown in their epic gains.

"There could be a shift to value sectors like health care," said Andrew Rosen, president of Diversified Lifelong Advisors, in an interview with CNN Business.

"It's healthy to see the recent tech pullback. There needs to be more diversification."

Valuations for tech and other growth stocks may also come under pressure if the economy continues to rebound next year -- a scenario that could pick up pace once a Covid-19 vaccine becomes widely available.

Investors may soon rotate back into hard hit consumer stocks, many of which still pay solid dividends despite the pandemic. With that in mind, defensively oriented stocks -- companies with lots of cash and little debt -- could thrive.

"Companies with stable balance sheets, reliable cash flows, and the capital to bridge the gap created by Covid-19 would outperform," said Lauren Goodwin, economist and multi-asset portfolio strategist with New York Life Investments, in a report Monday.

International stocks, particularly those in markets like China that were a main target of Trump's trade wars, could rebound too.

"Emerging markets could benefit from less of an 'America First' policy under Biden," Rosen added. "He may try to fix some international relationships to pave way for less acrimonious trade policies."

Despite the early returns, it may be unwise to focus too heavily on how markets are doing in the immediate aftermath of the election. Short-term successes could also become longer-term investing flops.

"Financials were the best-performing sector on the day after the 2016 election, and that group, along with energy, were the top two over the ensuing month," ClearBridge's Schulze noted. "While these groups continued to show strength into early 2017, they have been two of the three worst-performing sectors since."

Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
London Stock Exchange Faces Historic Low in Initial Public Offerings
A new online platform has emerged in the United Kingdom, specifically targeting Muslim men seeking virgin brides
Trump Celebrates Independence Day with B-2 Flyover and Signs Controversial Legislation
Boris Johnson Urges Conservatives to Ignore Farage
SNP Ordered to Update Single-Sex Space Guidance Within Days
Starmer Set to Reject Calls for Wealth Taxes
Stolen Century-Old Rolls-Royce Recovered After Hotel Theft
Macron Presses Starmer to Recognise Palestinian State
Labour Delayed Palestine Action Ban Over Riot Concerns
Swinney’s Tax Comments ‘Offensive to Scots’, Say Tories
High Street Retailers to Enforce Bans on Serial Shoplifters
Music Banned by Henry VIII to Be Performed After 500 Years
Steve Coogan Says Working Class Is Being ‘Ethnically Cleansed’
Home Office Admits Uncertainty Over Visa Overstayer Numbers
JD Vance Questions Mandelson Over Reform Party’s Rising Popularity
Macron to Receive Windsor Carriage Ride in Royal Gesture
Labour Accused of ‘Hammering’ Scots During First Year in Power
BBC Head of Music Stood Down Amid Bob Vylan Controversy
Corbyn Eyes Hard-Left Challenge to Starmer’s Leadership
London Tube Trains Suspended After Major Fire Erupts Nearby
Richard Kemp: I Felt Safer in Israel Under Attack Than in the UK
Cyclist Says Police Cited Human Rights Act for Riding No-Handed
China’s Central Bank Consults European Peers on Low-Rate Strategies
AI Raises Alarms Over Long-Term Job Security
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Musk Battles to Protect Tesla Amid Trump Policy Threats
Air France-KLM Acquires Majority Stake in Scandinavian Airlines
UK Educators Sound Alarm on Declining Child Literacy
Shein Fined €40 Million in France Over Misleading Discounts
Brazil’s Lula Visits Kirchner During Argentina House Arrest
Trump Scores Legislative Win as House Passes Tax Reform Bill
Keir Starmer Faces Criticism After Rocky First Year in Power
DJI Launches Heavy-Duty Coaxial Quadcopter with 80 kg Lift Capacity
U.S. Senate Approves Major Legislation Dubbed the 'Big Beautiful Bill'
Largest Healthcare Fraud Takedown in U.S. History Announced by DOJ
Poland Implements Border Checks Amid Growing Migration Tensions
Political Dispute Escalates Between Trump and Musk
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
US Senate Votes to Remove AI Regulation Moratorium from Domestic Policy Bill
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
Jury Deliberations in Diddy Trial Yield Partial Verdict in Serious Criminal Charges
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
King Charles Plans Significant Role for Prince Harry in Coronation
Two Chinese Nationals Arrested for Espionage Activities Against U.S. Navy
Amazon Reaches Major Automation Milestone with Over One Million Robots
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
Robots Compete in Football Tournament in China Amid Injuries
×