4 Industries That Could See Stock Gains When Joe Biden Assumes Office

To begin, let’s take you through a hypothetically alternate scenario. Elizabeth Warren has just won the 2020 Presidential Election. As the White House prepares the transition to a Warren Administration in January 2021, stocks in Apple, Facebook, Microsoft, Amazon and Alphabet have taken a pummeling throughout November and December. As we know, these FAAMG companies have a huge impact on the stock market, so it causes a tailspin in declines of other stocks (chip makers, marketers, games companies, etc.) and, potentially, a stock market crash. 

Sounds far-fetched? Just last year Warren was considered the favorite for the Democratic nomination, and she also wrote a detailed memo calling for the breakup of Big Tech. It’s not a stretch to say that Warren could have won, and changed the fortunes of Big Tech in the process. Of course, she didn’t win, and Joe Biden did. But the point is that US Presidents can have an outsized impact on the stock market. As we have seen over the last four years, even a tweet can send stocks soaring or reeling. 

The markets seem to be slowly warming to an idea of a Biden presidency, but which industries and stocks could gain throughout his tenure? We look at four potential winners below:

Manufacturing 

It’s almost guaranteed that Joe Biden is going to spend big on infrastructure. It was a huge part of his platform and the cornerstone of his “Build Back Better” campaign. America really needs investment in infrastructure, and Biden will move away from tax cuts and corporate giveaways. 

You can easily pick the usual suspects for stock gains in an infrastructure and building boom, with companies like Caterpillar gaining. However, there could also be gains for forgotten sectors like the railroads. A white paper from Bloomberg talked of a “second railroad revolution”, and while it won’t go that far, you could see money being pumped into rebuilding a struggling industry. 

Green Technology

An absolute given if you have listened to speeches given by Biden and influential Democrats, the investment in green technology will likely boom in 2021 and beyond. We have already seen renewable energy companies’ stocks gain as soon as it became clear Biden had won, but there should be more gains coming down the line. 

Indeed, it’s worth remembering that renewable energy companies could also pick up gains as a direct consequence of tougher regulations on the fossil fuel industry. Biden will surely try his hardest to undo Trump’s rollback, and there is every chance that new regulations are tougher than in the Obama era. 

Industries Hit by Trump’s Tariffs 

A bit of an odd assortment of names here, but the likes of Ford, Caterpillar, Black & Decker, Harley Davidson and Tyson Foods were all hit hard by Donald Trump’s trade wars with the EU and China. Biden will certainly take a friendlier approach with the former. And, while it might seem politically expedient to seem tough on China, you can expect less draconian measures when it comes to tariffs. 

It doesn’t mean you should pump your money into soybeans overnight, but a Biden presidency will surely grease the wheels for companies that depend on imports and those that are exporting to places like Europe and China. We have already seen the UK drop the EU’s tariffs on Boeing, which came about after a huge row over state aid. Part of that was seen as the UK looking to provide a sweetener to Biden in return for a trade deal after Brexit, but we will expect to see more – including a softening in the stance of the EU. 

Gambling, Casino and Sports Betting 

It’s perhaps ironic, given Biden’s predecessor owned casinos, but the 46th President might be even better for the industry. First, however, we should state that Biden is very much in favor of the states deciding their own laws in terms of gambling. After the Supreme Court’s decision on sports betting in 2018, 22 states ow have legalized sports betting (with more to follow). 

Casino is a little different in terms of restrictions outside of the usual hotspots like Nevada and New Jersey, and many American’s might hop over the border to play at Canada’s major online poker site. Still, several states have laid out plans for legalized online casinos, and there is a sense that the sports betting decision by the SCOTUS could open the floodgates.  

But the interesting aspect of the Biden presidency is that the federal government could get involved in regulating the gambling industry, particularly sports betting. Market Watch reports that it is something that has bi-partisan support from Chuck Schumer and Mitt Romney. The big sports leagues are pushing for this too, knowing that harmonious regulation can help with revenue-making.