Top Stocks For A Harris Victory

Top Stocks For A Harris Victory

The election is just weeks away. 

It looks like a close one. 

One or two percentage points are going to make the difference.

We’re not going to make a prediction here.

Aside from the fact that whoever wins – there will be a few (and potentially big) bucks to be made.

Today we’re going to look at just a Harris victory because it could breathe life into a sector that has been absolutely crushed in the last few years. 

First though, we’ll look back at how a past election created a 300%+ winner in just four months for those paying attention to politics and markets.
 

More Change, More Gain

Every president since FDR has come in with some sort of “First 100 Days” agenda. 

The first Obama term was no different.

His first 100 day plan included a nod to a campaign promise about stem cell research. 

Embryonic stem cell research was quite controversial at the time.

President Bush had a ban on public funding for it.

Obama promised to lift the ban during the campaign. 

Obama took the win and did just that in his first 100 days. 

Obama issued an official “Presidential Memorandum” that allowed government funding for embryonic stem cell research. 

The anticipation and rumpre-memorandum hype sparked a major run in stem cell stocks. 

Geron Corp (GERN) was one of the big, pure-play stem cell stocks at the time and it rode that wave in a big way.

Geron shares were less than $2 per share in October 2008.

They more than quadrupled in the next four months when they passed $8 per share in January 2009.

That was all about one relatively small campaign promise unleashing a major rebound in a beaten up sector.

Now we think we’re seeing a similar story play out.

Preview Of Harris Roadmap

The EV industry has been crushed.

The hyper-growth industry is slowing drastically. 

Every early-adopting consumer who wanted an EV has largely gotten one. 

EV stocks have collapsed. The S&P Kensho EV Index is down 67% from its 2021 peak. 

And there’s no turnaround coming soon because most Americans are still skeptical about the grand promises of EVs.

A Pew survey found that just 29% of Americans would “seriously consider” an EV as the next vehicle.

It’s ugly in the EV world and it was all quite predictable by sensible people. 

But you can’t include many of the major auto companies in that list of sensible people though. 

The auto giants have poured tens of billions of dollars into the EV hype. 

They’ve had to cut back production, push production plans out by years, and in some cases, outright cancel EV projects even after billions have been invested.

They need a bailout and a Harris Administration is likely to give it to them too. 

It won’t be big checks or anything politically toxic like that.

Instead, it will be something much more opaque.

The Biden Administration has already shown the path.

Biden and team have recently implemented new mileage standards for new cars. 

These standards – known as the CAFE standards – set the average mileage required for all automakers.

An automaker can make whatever mix of trucks, SUVs, EVs, and hybrids they want, but the average fuel economy must meet the CAFE standard number.

The chart below shows the standard has been slowly walking up to 30 MPG for years:
 

The required improvements have been slow and gentle.

That’s all changing now.

The new standards would be a leap from less than 30 MPG to 53.5 MPG by 2032.

This giant leap in fuel efficiency could require as much as 50% of all new cars to be fully electric.

It’s just the type of move that could save struggling EV plays too. 

Take Rivian (RIVI) for example. It has slowed down expansion a lot, sitting on its cash hoard for better times.

It’s in survival mode now, but it could change when EVs are practically mandated.

There’s also companies like Lucid Motors (LCID). 

The survival of this high end EV maker is no guarantee.

But it could get a lot back after its 94% decline from previous peak levels if customers are given far fewer EV alternatives.
 

Conclusion

In the end, the play here is simple.

A sector has been beaten up so badly, but government regulation could make it a big winner again. 

A new Harris administration would likely support the massive jump in CAFE standard and could propose even more.

Change is coming one way or another. 

And change can bring big gains.

This election will have plenty of change and plenty of gains too.