The last two weeks have been full of a mix of emotions: relief and a boost of enthusiasm for scores of democrats. Many of us are celebrating President Biden’s decision to step down and endorse Vice President Kamala Harris. This shift has also sent the GOP into reassess their strategy with a new set of opponents for November.
Kamala Harris is possibly best known as VP and for her prosecution skills. We have seen her character and skills in her roles as District Attorney in San Francisco and as the former Attorney General of California. As a Senator and in her current position, she has been a strong advocate for middle class families, and has taken a stand for women’s rights and reproductive rights. People also recognize her for having worked on immigration issues at the southern border.
Brand new to the ticket is Tim Walz, two term Minnesota Governor, former teacher, and football coach. Also known for being strong on both business and implementing progressive policies including free lunch for all school kids, labor protections, and codifying the legalization of abortion.
As we contemplate a Harris-Walz win in November, just how would this teams’ policies as President and Vice President of the United States play out for investors?
Once Harris is the official candidate after the Democratic National Convention in August, her campaign will roll out specific policy plans and agendas, and in the meantime, we can get a sense from her role as Vice President, her Senate voting record, and her work as Attorney General. Tim Walz’s track record also provides some hints as to future policy support and how future federal actions may play out for markets.
Here is what investors can expect:
As president, Kamala Harris is going to need to show voters that she can lower inflation while also creating jobs. A cooling of inflation would not only support consumers, lower prices for materials would also boost the construction industry, as well as food suppliers, restaurants, and hotels.
Where will we be likely to see additional jobs in the future? And what companies will benefit?
Harris supported both the CHIPS Act of 2022 and the Inflation Reduction Act of 2022 (IRA), both of which will fund job creation as well as innovation in the US. The CHIPS and Science Act is currently investing billions to encourage semiconductor and chip manufacturing at home. As the funding continues to roll out for these initiatives, we are likely to see corporations supporting the construction of new domestic factories and an increase in jobs across these industries. Investors are also likely to see additional revenues via government grants to semiconductor companies working to bring manufacturing back to the states. Given the combined track records of both Harris and Walz, we also stand to see a boost to the green energy economy. As supported by the IRA and seen in Harris’ legacy of promoting the transition away from polluting industries and toward a renewably sourced and electrified economy, we could see government incentives for the adoption of electric vehicles, as well as clean energy across the country. The renewable energy sector which has been out of favor, may very well rotate back in with additional legislation and government funding.
Harris has a legacy of addressing issues of inequality, including worker rights. Walz is also strong on implementing policies that support working America. We can expect a presidential platform that cares about employees. And with that in mind, investors will do well to focus on companies and areas of the economy that pay a living wage, that invest in workers, that offer transparency about recruitment, hiring, promotion records, and that have strong human capital management programs and policies. As an example, Harris has recently announced she will work toward Paid Family Leave (the US is one of the only developed countries without a comprehensive national benefits policy), a policy that Walz has already implemented in Minnesota. Companies already offering these benefits will be ready, and even ahead of any proposed legislation.
Harris’ decision not to meet with Netanyahu during his US visit in July suggests that she is not in accordance with a continued war in Gaza. The defense/aggression industry ebbs and flows with government spending, with the bulk of revenue coming from the US government. If US support for wars diminishes, so will the need for weapons production, and we could see a cooling of valuations across the defense sector.
Both names on this ticket have been vocal advocates for women's rights, and issues pertaining to gender inequality. We can expect this duo to continue their support for women’s reproductive health care rights. We may also see efforts to reduce or even eliminate gender pay gaps within corporate America, boding well for those companies that have already embraced gender equality in the workplace.
While we expect to see specific plans and campaign promises soon, investors get excited and prepared for the potential areas of growth if this pair prevails in November.
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The views presented here are those of Nia Impact Capital (“Nia”) and these views may be subject to change. All information is obtained from sources believed to be reliable, yet Nia does not certify the accuracy or completeness of this information.This article does not constitute an offer to sell, or the solicitation of any offer to buy any security. All investments carry risk. An investor is strongly advised to consult with their investment professionals prior to making investments to ensure that they understand any associated risks.
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