Wall Street is starting to like Florida Gov. Ron DeSantis’ 2024 presidential run prospects so much that it’s already eyeing stocks that could benefit, as well as those that could win the White House. can.
Strategas Research Partners, an economic and market advisory firm run by leading market analyst Jason Treinert, is among the firms assessing the market impact of the DeSantis presidency, with a client report titled “DeSantis Winners & “Losers Baskets” is titled.
The report, published last week, was obtained and reviewed by Fox Business. It bases its research primarily on DeSantis’ policy positions as governor of Florida. It’s another sign that big financial players are betting that DeSantis will run for president in 2024, beat former President Trump in the GOP primary, and beat Joe Biden in the general election. .
It’s also a sign that Wall Street believes a DeSantis victory will have market implications given his record as Florida governor. Stocks that DeSantis identifies as winners are already outperforming those that DeSantis identifies as losers, according to the report.
The report added that DeSantis is a slight favorite in the betting odds to win the Republican primary against Trump. “Following DeSantis’ resounding victory in Florida, client interest in DeSantis’ candidacy has increased, particularly regarding the company’s risks and opportunities,” the report said. “It makes sense, DeSantis has unorthodox Republican policies.”
“We expect President Biden to announce his candidacy after his State of the Union on February 7,” the report said. “Former President Trump was on the campaign trail last weekend. Nikki Haley will likely announce her candidacy in two weeks, and Florida Gov. Ron DeSantis is hinting that he might enter the race. Is.
Financial advisers who have read the Strategas research urge caution about betting on the big market based on the report. First, certainly considering the presidential election, DeSantis has yet to announce. In recent weeks he has been meeting with enthusiastic financial industry fundraisers, who believe he can defeat Joe Biden or any other Democrat, while Trump cannot. The former president is still embroiled in various scandals and his reputation has been tarnished by his role in the January 6 riots.
But as Fox Business reported, DeSantis has told donors it’s not his priority to get embroiled in a messy primary battle with Trump for the GOP nomination, raising some suspicions that he will. Will challenge the former president in the primary. Trump is the only GOP candidate to officially announce his intentions, and he has already targeted DeSantis with his well-known vitriol.
In addition, financial advisers say some of the report’s findings are disconcerting. Energy company ConocoPhillips is a DeSantis “winner” because of the Florida governor’s support for drilling for “fossil fuels like natural gas and crude oil.” DeSantis is likely to loosen regulations that have curtailed drilling.
But oil company profits are rising amid the Biden administration’s acceptance of restrictions on the industry and its environmental social governance investment mandates designed to reduce carbon emissions by limiting supply. are The result is higher energy prices, higher profits and higher energy company stocks. Since Joe Biden took office in January 2021, ConocoPhillips shares have more than doubled to $108 a share, more than the S&P 500 index of large company stocks.
Moreover, DeSantis’ market policies may not diverge too much from Trump, who during his four years in office where the former president cut taxes, reduced regulations, but Amazon founder Jeff Bezos, who the Washington Post wrote. Owners also pick up battles with big businesses, including AT&T. which until recently was owned by the left-leaning CNN cable network.
DeSantis is famous. Feud with Disney His attacks on a state law banning sex education to young children. Strategas Adds Disney to 19 DeSantis “Loser” Stocks
That said, the four-page report is a sign that Wall Street is increasingly convinced that DeSantis can win the White House in 2024, and that clients are shifting their portfolios to benefit from his policies. Planning should begin.
Likewise, they should avoid and “short” or bet against stocks that will face DeSantis-related headwinds, or those Strategas included in his “DeSantis Loser Basket.” These are the companies that Strategas says follow the same corporate policies as the aforementioned Disney. Other companies in this basket include “vaccine companies”, which adopt so-called Environmental Social Governance or ESG investment policies, and those that operate substantially in China.
Recall how DeSantis challenged Disney, one of the state’s largest employers, to lose a major tax subsidy because of its opposition to the sex-ad law by removing its favorable tax status in the state. done Strategas says DeSantis will likely use the Disney template nationally against companies that adopt similar left-wing policies, including embracing so-called environmental social governance, or ESG investing.
ESG promotes reducing the carbon footprint of asset managers’ portfolio companies and other progressive political positions. But the mandate is increasingly under attack from GOP elected officials who say it has led to higher gas prices and is advancing a left-wing political agenda.
As Governor DeSantis has recently targeted Black Rock, The world’s largest asset manager has been at the forefront of ESG, pulling out $2 billion in sovereign wealth funds managed by the firm. Strategas sees additional national regulations reducing ESG if DeSantis is elected. Because ESG investing often carries higher management fees than other stock-picking methods, BlackRock becomes a “loser” because these new regulations could reduce profits.
Also on the losers list are Amazon and Apple, two corporate whips on the right because they are seen as Silicon Valley vigilantes who have stifled conservative speech. Meanwhile, Apple has substantial manufacturing ties with China. Given the country’s geopolitical ambitions and its role in the Covid pandemic, the Strategas report sees companies with ties to China as “losers”.
Meta, Facebook’s holding company, censors conservative opinions as well as lists losers. Drugmakers Pfizer and Moderna also lost to DeSantis. Strategas sees the de Santis administration as less stringent in terms of the COVID vaccine mandate, thus these companies will see profit margins decrease. His Justice Department may also pursue claims that the companies inflated their utility, the report said.
Strategas said 19 of DeSantis’ winners were stocks in the border security, defense and energy sectors. “We expect DeSantis to be a strong supporter of fossil fuels, but not opposed to renewables,” the report added. “Other areas where DeSantis could be positive are financial companies that avoid ESG and could benefit from deregulation.”
Among the latter, JP Morgan, the big bank run by CEO Jamie Dimon, which has publicly criticized ESG, lists stocks that will win under President DeSantis. Defense manufacturers Lockheed Martin and Raytheon Technologies are also winners as DeSantis is seen as a boost to the defense budget.
CoreCivic Inc. One company named, which owns and operates private prisons, could see its business expand dramatically — and its share price rise — as DeSantis sees the influx of immigrants to the southern border. Focuses on securing policies and the company benefits from government contracts.
SoFi Technologies makes money processing student loans. A possible boost to his business, Stratgas says, would be the end of President Biden’s student loan forgiveness program under DeSantis. This means higher fees for processing these loans. Stratgas also predicts that President Joe Biden will announce his plans to run for re-election in 2024 after tonight’s State of the Union speech.
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