In terms of energy-related stocks, the Republican Platform states that “We remain committed to aggressively expanding trade opportunities and opening new markets for American energy through multilateral and bilateral agreements, whether current, pending, or negotiated in the future.” Any policies that support energy production may be a boon to oil & gas concerns.
Again, no matter which party ends up in the White House in November, traders will need to stay nimble to find opportunity in the uncertainty. Now more than ever, direction matters.
The energy sector affects jobs, the economy, and the environment. Both Hillary Clinton and Donald Trump support the use of natural gas, a cleaner alternative to coal. Trump aims to “unleash American energy,” allowing the unfettered production of oil (USO), coal, natural gas (UNG), and other sources to create jobs and push the United States toward energy independence.
Trump has also called for the optimization of domestic drilling and shutting down partnerships with oil-rich OPEC (Organization of the Petroleum Exporting Countries) nations. However, this could weaken the relationship between the United States and OPEC and have an adverse effect on prices in emerging markets (EMB). Trump also plans to withdraw the Clean Power Plan, a key element of President Barack Obama’s strategy to fight climate change.
Conversely, Clinton is committed to Obama’s climate-change goal of reducing greenhouse gas emissions by up to 30% by 2025. In addition, Clinton wants to deploy 500 million solar panels for clean energy, ensuring the United States generates enough renewable energy (XOP) (AMLP) to power every home in America within ten years.
However, Clinton may charge a greater fee on extraction to transition to clean, renewable energy (OIH) and energy efficiency. Clinton has proposed spending $60 billion to switch from fossil fuels to cleaner energy.
No matter who wins, the market tends to respond far better to election processes whose outcomes are more predictable. With Clinton marginally leading, anything could change from now until election day. Should Clinton win, there would be a certain amount of volatility (VXX) (XIV) in the event of a dispute of the results.