10 most actionable policies if Harris wins & stock implications: Jefferies

In a note to clients published Friday, Jefferies strategists outlined what they believe are the 10 most actionable policies if Kamala Harris wins the presidential election, based on the 2024 Democratic Platform and Harris’ recent statements.

According to Jefferies, these proposals require minimal legislative action and focus on Tax, Regulations, Industrial Policy, Trade, and Energy Transition.

1) ‘Restore top individual income tax rate to 39.6% on income above $400,000 for single filers and $450,000 for joint filers:’ The restoration of this tax rate, a rollback of the 2017 Tax Cuts and Jobs Act, is expected to impact high-income earners.

Positive implications could be seen for mortgage companies like Guild Holdings (GHLD) and LoanDepot (LDI), while luxury retailers such as Arhaus (ARHS) and Williams-Sonoma (NYSE:) could face headwinds due to decreased discretionary spending among affluent consumers.

2) ‘Set new rules and penalties to prohibit food and grocery companies from expanding profit margins more than warranted:’ This policy aims to combat inflation and prevent price gouging in the food sector. Companies like Costco (NASDAQ:), Target (TGT), and Walmart (WMT), among others, might face challenges if stricter regulations are imposed, according to Jefferies.

3) ‘Continue antitrust enforcement and reduce hidden fees:’ The Harris administration is likely to intensify antitrust enforcement across various sectors, including technology and healthcare. Several companies such as Amazon (NASDAQ:), Adobe (NASDAQ:), Alphabet (NASDAQ:), Meta (NASDAQ:), and Pfizer (NYSE:) could be under scrutiny, potentially affecting their M&A activities.

4) ‘Lower drug costs by requiring pricing transparency from Pharmacy Benefit Managers (PBMs):’ This initiative targets reducing drug costs by increasing transparency in PBM pricing. Jefferies strategists note that could benefit generic drug manufacturers like Teva (TEVA) but could negatively impact large PBMs like CVS Health (NYSE:).

5) ‘Develop AI guidelines via the AI Safety Institute:’ The establishment of AI guidelines is expected to regulate the use of AI in various sectors. Cybersecurity firms like Palo Alto Networks (NASDAQ:) and CrowdStrike (NASDAQ:) could benefit from increased demand for AI-related security solutions.

6) ‘Use American-made steel, lumber, drywall, concrete, and other products for every federally-funded infrastructure project:” This policy is designed to boost domestic manufacturing and could bode well for companies like Nucor (NYSE:) and Steel Dynamics (NASDAQ:).

7) ‘Reshore supply chains for critical materials and technologies against China:’ Efforts to reduce reliance on China for critical materials and technologies could favor companies involved in domestic production, such as Intel (NASDAQ:) and Texas Instruments (NASDAQ:).

8) ‘Limit exports of advanced technologies to China that are deemed harmful for national security:’ Restrictions on technology exports to China could negatively impact companies like Nvidia (NASDAQ:) but benefit cybersecurity firms like CyberArk (CYBR).

9) ‘Electrify federal fleet and other heavy-duty vehicles, including school buses and transit buses:’ The push towards electrification of federal vehicles could drive demand for companies like Albemarle (NYSE:) and Alcoa (NYSE:), which supplies lithium for batteries.

10) ‘Require low-carbon materials and clean power to be used in all new federal buildings by 2030:’ This policy is expected to boost demand for low-carbon materials, benefiting companies such as Alcoa, UL Solutions (ULS), and Linde (NYSE:).