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In a note to clients published Friday, Jefferies strategists outlined what they believe are the 10 most actionable policies if Kamala Harris wins the presidential election, based on the Democratic Party’s 2024 platform and Harris’ recent statements.
According to Jefferies, these proposals require minimal legislative action and focus on taxation, regulation, industrial policy, trade and energy transition.
1) ‘Restoring the top individual income tax rate to 39.6% on income over $400,000 for single filers and $450,000 for joint filersThe restoration of this tax rate, a rollback from the Tax Cuts and Jobs Act of 2017, is expected to hit higher-income earners hardest.
Positive impacts could be seen on mortgage companies like Guild Holdings (GHLD) and LoanDepot (LDI), while luxury retailers like Arhaus (ARHS) and Williams-Sonoma (NYSE:) could face headwinds due to lower discretionary spending among affluent consumers.
2) ‘New rules and penalties to prevent food and grocery companies from expanding profit margins beyond what is allowedThe policy is aimed at combating inflation and preventing price gouging in the food sector. According to Jefferies, companies like Costco (NASDAQ:), Target (TGT), Walmart (WMT), and others could face challenges if stricter regulations are imposed.
3) ‘Continue to enforce antitrust laws and reduce hidden fees.The Harris administration is likely to ramp up antitrust enforcement across sectors, including technology and healthcare. Several companies, including Amazon (NASDAQ:), Adobe (NASDAQ:), Alphabet (NASDAQ:), Meta (NASDAQ:), and Amazon, have announced plans to expand antitrust enforcement. Pfizer (NYSE:) may be under scrutiny, which could impact its merger and acquisition activities.
4) ‘Lowering Drug Costs by Requiring Pricing Transparency from Pharmacy Benefit Managers (PBMs)The initiative aims to lower drug costs by increasing transparency in PBM pricing. Jefferies strategists note that this could benefit generic drugmakers like Teva (TEVA) but could hurt large PBMs like CVS Health (NYSE:).
5) ‘Developing AI Guidelines through the AI Safety InstituteThe creation of AI guidelines is expected to regulate the use of AI across industries. Cybersecurity companies such as Palo Alto Networks (NASDAQ:) and CrowdStrike (NASDAQ:) could benefit from the increased demand for AI-based security solutions.
6) ‘Use steel, lumber, drywall, concrete and other products made in America in every federally funded infrastructure project.“This policy is designed to boost local manufacturing and could bode well for companies like Nocor (New York Stock Exchange:) and Steel Dynamics (NASDAQ:).
7) ‘Re-inward supply chains for critical materials and technologies against ChinaEfforts to reduce reliance on China for critical materials and technologies could benefit companies involved in domestic production, such as Intel and Texas Instruments.
8) ‘Restricting exports of advanced technologies to China that are deemed harmful to national securityRestrictions on technology exports to China could hurt companies like Nvidia (NASDAQ:) but benefit cybersecurity firms like CyberArk (CYBR).
9) ‘Electrification of federal fleet and other heavy vehicles, including school buses and public transit busesThe push to electrify federal vehicles could lead to increased demand for companies like Albemarle (New York Stock Exchange:) and Alcoa (NYSE:), which supplies lithium for batteries.
10) ‘Require low-carbon materials and clean energy in all new federal buildings by 2030This policy is expected to boost demand for low-carbon materials, benefiting companies such as Alcoa, UL Solutions (ULS), and Linde (NYSE:).
