BerandaComputers and TechnologyPredicting the stock market impact of the Presidential election outcome

Predicting the stock market impact of the Presidential election outcome

The effect of the election on health technology and health services stocks will likely depend not only on who wins the Presidency but also on whether or not Republicans maintain control of the Senate.

If Democrats win both the White House and the Senate (and maintain control of the House) you’ll see revived efforts to pick up the pieces of the Affordable Care Act and continue to transform the U.S. healthcare system. This transformation is likely to come at the expense of private healthcare companies’ bottom lines.

On the other hand, Republicans maintaining control of the White House and/or Senate would likely result in a divided government, with no significant legislation on healthcare being passed.

Cannabis

Not surprisingly, most major cannabis stocks have a very low Trump Beta, meaning they are likely to perform well if Biden is elected.

Canopy Growth Corp ($CGC) has a Trump Beta of -0.20, GW Pharmaceuticals ($GWPH) comes in at -0.29, and Cronos Group ($CRON) has a Trump Beta of -0.31.

Though Biden took a tough stance on federally controlled substances back in the 1980s and 1990s, he has recently embraced a platform of decriminalizing marijuana. Additionally, running mate Kamala Harris is known as an advocate for legalization. As a junior senator in California, she sponsored the Marijuana Opportunity Reinvestment and Expungement (MORE) Act, which the Democrat-controlled House Judiciary Committee passed last November. The bill hasn’t gotten anywhere yet, but many suppose that a democratic sweep this November could lead to marijuana legalization.

On the other hand, cannabis legislation has not been a priority under Trump, and there is no reason right now to believe that this will change during a second term.

Large-cap Tech Companies

Companies in the technology services and electronic technology sectors have an average Trump Beta of 0.12 and 0.15, respectively. This is primarily driven by the large-cap tech companies that dominate their industries, with Microsoft, Google, Apple, and Adobe all showing strong positive correlations with a Trump re-election.

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