This section stands to have the most meaningful impact on our short term decision making. There are few certainties when it comes to what a Biden Administration will be allowed to implement with a GOP controlled Senate, but it is no secret what Biden and his cabinet will try to achieve in his presidency.
While the controversial policy initiatives may now be off the table, two primary areas that we can expect some movement will be renewed support for Obama-era environmental pursuits and more accessible and affordable health care in respect to President Trump’s positions. We think big banks and big tech companies will not be in Biden’s cross hairs for at least 2 more years and they have been spared from landing in the losers’ column. With respect to Big Tech, recall a tremendous amount of financial support for the Democratic party came from Silicon valley, so it is reasonable to infer favors will be called upon…. So stay tuned, as we are, to how this pans out.
On the other hand, aerospace and defense spending is sure to be examined closely. Aerospace has been hit hard by the pandemic, in all but military spending. The large aircraft companies and the myriad firms whose fate follows them should recover in 2021, but one needs to be mindful of Biden looking more towards social spending than military spending, so timing will be an issue here.
In addition to renewable energy and health care, we believe an area of the market that is sure to surge is home building. We expect the price of construction to continue to rise, as will the price of single-family homes as the demand continues for more living space.
We will continue to update our “winners and losers” section as more information becomes available. Please stay tuned for further analysis!