Major U.S. benchmarks witnessed an impressive recovery from losses on Monday following the news that Democratic candidate Hillary Clinton will not be charged by the Federal Bureau of Investigation (FBI). Clinton’s presidency campaign as well as the U.S. stock markets had taken a major hit in the past few days on the news of the FBI probing Clinton’s new emails related to its investigation “of former Secretary Clinton's personal email server.”
The investigating agency’s clean report came as a sigh of relief for both Clinton and major benchmarks. While the stock markets registered the biggest one-day gain in more than seven months on Monday, the fear gauge, CBOE Volatility Index (VIX) plunged nearly 17% following nine-straight sessions of gains. Though recently released poll results indicate a close contest, most of the polls show that Clinton has a marginal lead over Republican candidate Donald Trump.
Given this backdrop, it will be interesting to find out which sectors are poised to gain the most if Clinton emerges victorious.
Sectors to Benefit if Clinton Wins
Solar companies are expected to be one of the biggest beneficiaries if Clinton manages to win the election. One of the biggest agendas of her campaign was the installation of 500 million solar panels throughout the country by 2020. In one of the presidential debates, Clinton said she will try to “grip” and “deal” with the climate change by installing “a half a billion more solar panels.” She also added that by doing the same, “we can have enough clean energy to power every home.”
If this happens, then the solar capacity in the U.S. will expand nearly 5-7 times from the current level. In addition to this, several initiatives of the federal government, which include extension of tax credits for solar installation, are also expected to provide a boost to this sector. The impressive outlook for the sector bodes well for solar companies such as SolarCity Corp. and Enphase Energy, Inc. (ENPH - Free Report) . These two companies also hold a Zacks Rank #2 (Buy), indicating their bright prospects in the near future.
Though Clinton’s victory may have a negative impact on drugs manufacturers given her intention to put a stop on charging excess prices for drugs, hospital operators might benefit from her presidency. Clinton is expected to expand the number of enrollees under Obamacare at more affordable premiums. She promised to reduce the premiums from the current 9.66% to not more than 8.5% if she wins the election.
She said: “I've fought for quality, affordable health care my entire career. As president, I'll defend the Affordable Care Act, build on its successes, and go even further to reduce costs.” Though insurance companies are expected to get affected if expansion of enrollees under the Obamacare truly takes place, companies that are engaged in managing hospitals will likely get a boost.
Some of these companies include HCA Holdings, Inc. (HCA - Free Report) and LifePoint Health, Inc. (LPNT - Free Report) . While HCA Holdings operates general, acute care hospitals throughout the U.S., LifePoint Health is involved in operations of community hospitals, regional health systems, physician practices, outpatient centers, and post-acute facilities across the nations. Both these companies carry a Zacks Rank #2.
Clinton has talked about lifting defense spending and ending defense sequesters cuts. She argued: “The sequester makes our country less secure. Let’s end it and get a budget deal that supports America’s military, our families and our country.” Meanwhile, her strong intentions to put an end to terrorism and pledge to take steps to cut down cyber security threats are expected to have a positive impact on the defense sector.
Meanwhile, several actions taken by her in the past as Secretary of State, which include supporting intervention of the U.S. in Libya and arming Syrian rebels to stand against ISIS, also indicate that Clinton’s win will be a boon for the sector. Companies in the space like Engility Holdings, Inc. (EGL - Free Report) and General Dynamics Corp. (GD - Free Report) are thus poised to gain if Clinton wins the election. WhileEngility Holdings sports a Zacks Rank #1 (Strong Buy), General Dynamics has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
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