In 2019, Kamala Harris, then a Democratic senator from California, launched a presidential campaign. But she exited the 2020 election race two months prior to the Iowa caucuses. However, analysts have noticed that Harris’s 2024 campaign for president is a bit different, as quoted on yahoo finance. We would like to note that this shift in strategy could impact several investing areas in a different way. Let’s delve a little deeper.
No “Medicare for All,” Rather a Boost to ACA?
In 2020, Kamala Harris supported Bernie Sanders' Medicare for All plan, supporting a government-run healthcare system. However, in her current campaign, she has moved away from this stance, aligning more closely with Joe Biden's approach of strengthening the Affordable Care Act (ACA) and making its expansion permanent beyond 2025.
Oscar Health Inc. OSCR is a key beneficiary of this strategy. The company stands to benefit from the growing ACA Marketplace under the Affordable Care Act, also known as Obamacare. It is a digital health insurance company. The stock is up 11% over the past week (as of Jul 29, 2024).
HCA Holdings HCA, which is the largest non-governmental operator of acute care hospitals in the United States, should also benefit. The stock has gained 4% over the past week. Previously, when the Affordable Care Act was passed, hospitals emerged as a big winner.
Fracking and Energy Policy
Previously, Harris promoted the Green New Deal, which included a ban on fracking, a controversial drilling technique in the fossil fuel industry. In contrast, her current campaign has moderated this stance. Her stance now seems in line with Biden's more moderate approach that seeks to achieve environmental goals while maintaining energy production and affordability.
She now opposes a fracking ban. This could be good news for energy ETFs like Energy Select Sector SPDR ETF XLE.
Government Intervention in Energy and Transportation
The Green New Deal proposed significant government oversight in transforming the energy and transportation sectors, a stance Harris previously endorsed. Today, she puts more stress on incentivizing change through market mechanisms rather than government mandates. This again aligns more closely with Biden's approach of using tax credits and subsidies for green energy.
While ETFs like iShares Global Clean Energy ETF ICLN go well with this idea, electric car maker Tesla-heavy ETFs like Direxion Daily TSLA Bull 1.5X Shares TSLL should benefit.
On Federal Reserve Chairmanship
Harris, along with other liberal senators, opposed Jerome Powell's appointment as Federal Reserve Chair in 2018, citing concerns over his ties to the banking industry. However, Biden reappointed Powell for a second term, and there's a high chance that Harris would keep him the Fed Chair, if elected president. This reflects a potential shift toward a more realistic approach to economic governance.
Investors should note that the Powell-led Federal Reserve is likely to cut rates in September, with more cuts expected in the coming days. This should boost rate-sensitive sector ETFs like iShares U.S. Home Construction ETF ITB and Utilities Select Sector SPDR ETF XLU.
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HCA Healthcare, Inc. (HCA) : Free Stock Analysis Report
Energy Select Sector SPDR ETF (XLE): ETF Research Reports
iShares U.S. Home Construction ETF (ITB): ETF Research Reports
Utilities Select Sector SPDR ETF (XLU): ETF Research Reports
iShares Global Clean Energy ETF (ICLN): ETF Research Reports
Oscar Health, Inc. (OSCR) : Free Stock Analysis Report
Direxion Daily TSLA Bull 2X Shares (TSLL): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
