Synopsis: The upcoming 2024 U.S. presidential election holds substantial implications for various global sectors, especially in light of the policies and priorities likely under either a Democratic or Republican administration.
As the United States prepares for its 60th quadrennial presidential election on November 5, 2024, the close competition between Democratic candidate Kamala Harris and Republican candidate Donald Trump promises to shape a range of economic policies.
This tight race, according to opinion polls, sees Harris maintaining a narrow lead, though recent predictions show Trump gaining ground.
Given this unpredictable climate, potential shifts in industries such as technology, pharmaceuticals, oil and gas, metals, industrials, and defense are expected based on the election’s outcome, with analysts carefully monitoring trends and expectations.
Election Dynamics and Economic Forecast:
In October, the market prediction indicated a surge in Trump’s support, significantly narrowing the gap with Harris.
The reliance on mail-in ballots could delay final results, especially in swing states like Pennsylvania, Georgia, and Arizona.
Each candidate's stance on sectors critical to the economy is forecasted to carry distinct impacts on industries and investment climates worldwide, influencing areas from energy and healthcare to technology and defense.
Sectoral Analysis: Anticipated Impacts
Energy and Oil & Gas:
A Trump-led administration would likely favour traditional energy resources, including extensive drilling and exploration, potentially resulting in lower global oil prices.
This scenario could disadvantage upstream players while benefitting oil marketing companies (OMCs) and city gas distributors in India, such as HPCL, BPCL, IGL, MGL, and Gujarat Gas.
Harris, by contrast, is expected to advance renewable energy policies, raising carbon credits for oil and gas producers and driving investment in green infrastructure, which could positively impact Indian solar and EV sectors.
Technology and IT Services:
IT services companies in India, crucial to the U.S. tech landscape, might experience varying outcomes.
Both candidates are expected to push for onshoring, which could increase operational costs for Indian companies.
However, a Trump victory might benefit mid-cap IT firms due to potential policies limiting China’s trading status, potentially bolstering hiring for Global Capability Centers (GCCs) in India.
Harris’s policies might encourage increased corporate tax, which could reduce discretionary spending on technology in the U.S.
Pharmaceuticals:
The pharmaceutical sector, particularly in generic drug manufacturing, would see contrasting outcomes depending on the winner.
Trump’s administration might increase Medicare coverage for generic drugs, potentially benefiting Indian pharmaceutical companies with high generic volumes.
Harris’s administration could expedite the approval process for first-time generics, which would benefit generic manufacturers by providing faster market access.
Defense:
With Trump’s emphasis on defense and military readiness, Indian defense companies like Bharat Dynamics and Hindustan Aeronautics Limited (HAL) may experience eased supply chains and increased contract opportunities.
Harris, while committed to defense, would likely continue focusing on diplomatic resolutions, potentially fostering a stable global defense market.
Industrials and Manufacturing:
Trump’s policy of promoting the U.S. as a global manufacturing hub could positively influence multinational industrial firms.
Companies with robust U.S. partnerships, such as Siemens, ABB, and GE, may find enhanced business opportunities.
Under Harris, however, the focus may shift toward clean technology and green industrial investments, aligning with broader sustainability goals.
Election’s Broader Implications:
Both candidates bring unique perspectives on global trade and industry.
Trump’s inclination toward trade restrictions and tariffs could increase India’s export competitiveness in sectors like textiles, where Indian firms might benefit if Chinese exports face U.S. tariffs.
Harris’s commitment to climate initiatives suggests robust investment in utilities and renewable infrastructure, potentially driving demand for solar exports but posing challenges to LNG exports.
In conclusion, the outcome of the 2024 U.S. election could redefine sectoral dynamics, impacting industries from energy to pharmaceuticals, defense, and beyond.
For India, the implications are particularly noteworthy, as shifts in U.S. policy could foster both challenges and opportunities across its leading economic sectors.
Whether the election ultimately leans toward Trump’s pro-energy, defense-oriented policies or Harris’s focus on green energy and industrial reform, global markets and Indian companies alike are poised to recalibrate strategies to align with the next administration’s policies.
Disclaimer: This analysis is for informational purposes only and should not be interpreted as investment advice. Readers are encouraged to consult with financial advisors to understand how potential policy shifts may impact their portfolios before making any investment decisions.
