In­vestors are watch­ing these sec­tors af­ter midterms

The Star Malaysia - StarBiz - - Front Page -

NEW YORK: Eq­uity in­vestors are eye­ing six key sec­tors af­ter the midterm elec­tions re­sulted in the Democrats seiz­ing con­trol of the House of Rep­re­sen­ta­tives, while Repub­li­cans main­tained con­trol of the Se­nate.

While S&P 500 fu­tures edged higher, here are the sec­tors most likely to see moves.

Phar­ma­ceu­ti­cal and biotech­nol­ogy stocks may gain if the the stale­mate takes away the threat of drug pric­ing re­stric­tions, an­a­lysts have said.

They fore­cast that in­dus­tri­als would con­tinue to lan­guish un­der a di­vided gov­ern­ment as a ma­jor spend­ing pack­age would be un­lik­ley.

Tech­nol­ogy stock in­vestors can ex­pect more reg­u­la­tory scru­tiny, an out­come an­a­lysts ex­pected no mat­ter where con­gres­sional con­trol would up.

Banks and fi­nan­cial shares most likely won’t face tighter reg­u­la­tions as Pres­i­dent Don­ald Trump’s reg­u­la­tors are firmly in place.

It’s more com­pli­cated for en­ergy shares, with the out­come of lo­cal races set­ting the tone for oil and gas pro­duc­ers. Those re­sults re­mained un­clear.

And then there’s pot stocks. Mar­i­juana le­gal­iza­tion is on the bal­lot in four states, in­clud­ing recre­ational pot use in North Dakota and Michi­gan.

Pot re­mains il­le­gal at the fed­eral level. Mean­while, most sec­tors have to deal with the trade war.

Pol­icy watch­ers are skep­ti­cal there will be a shift to­ward China on trade.

Out­side the US, emerg­ing mar­kets are see­ing gains.

To be sure, some mar­ket watch­ers say not much will change and it’s mostly just about play­ing de­fense.

Greg Val­liere, chief global strate­gist at Hori­zon In­vest­ments LLC, said the elec­tion may have “only a mod­est im­pact on in­vestors” who have big­ger macro wor­ries, in­clud­ing ris­ing in­ter­est rates.

And CIBC’s head of port­fo­lio strat­egy Ian de Ver­teui writes that “his­tory sug­gests eq­ui­ties do fine post-midterms” even when they often re­sult in the pres­i­dent’s party los­ing seats.

Newspapers in English

Newspapers from Malaysia

© PressReader. All rights reserved.