Wall Street is beginning to love Florida Gov. Ron DeSantis’s prospects within the 2024 presidential election a lot that it’s already eyeing stocks that may profit, in addition to those that would tank, if he wins the White House.
Strategas Research Partners, an economic and market advisory firm run by the well-known market analyst Jason Trennert, is among the many firms gauging the market impact of a DeSantis presidency, with a client report titled “DeSantis Winners & Losers Baskets.”
The report, published last week, was obtained and reviewed by Fox Business. It bases its research totally on DeSantis’s policy positions as governor of Florida. It’s one more indication that major financial players are betting that DeSantis runs for President in 2024, can beat former President Trump within the GOP primary, and beat Joe Biden in the final election.
It’s also an indication that Wall Street thinks there will probably be market implications with a DeSantis victory given his record as Florida governor. Based on the report, stocks it identifies as DeSantis winners are already outperforming those it identifies as DeSantis losers.
The report added that DeSantis is a slight favorite within the betting odds to win the Republican primary against Trump. “After DeSantis’ landslide victory in Florida, client interest a few DeSantis candidacy has increased, particularly around company risks and opportunities,” the report said. “This is smart, with DeSantis having non-traditional Republican policies.”
DeSantis has told donors it’s not his preference to get embroiled in a nasty primary battle with Donald Trump for the GOP nomination.Getty Images
“We expect President Biden to announce his candidacy following his State of the Union on February seventh,” the report stated. “Former President Trump was out campaigning this past weekend. Nikki Haley will likely announce her candidacy in two weeks, and Florida Governor Ron DeSantis is indicating he’s more likely to get within the race.”
Financial advisers who’ve read Strategas research urge caution about making big market bets based on the report. First, while definitely considering a presidential run, DeSantis has yet to declare. In recent weeks he has been meeting with enthusiastic financial industry fundraisers, who imagine he can beat Joe Biden or every other Democrat, while Trump can’t. The previous President stays mired in various scandals and his repute tarnished by his role within the January 6 riots.
But as Fox Business has reported, DeSantis has told donors it’s not his preference to get embroiled in a nasty primary battle with Trump for the GOP nomination, raising some doubts he’ll challenge the previous President in a primary. Trump is the one GOP candidate to formally announce his intentions, and has already been targeting DeSantis along with his well-known vitriol.
Also, financial advisers say among the report’s conclusions are nebulous. Energy company ConocoPhillips is a DeSantis “winner” due to the Florida governor’s support of drilling of “fossil fuels like natural gas and crude.” DeSantis is probably going to scale back regulations which have curtailed drilling.
Nikki Haley could announce her presidential run soon.AP
But oil company profits have been soaring amid restrictions the Biden Administration has placed on the industry and its embrace of Environmental Social Governance investment mandates which might be designed to scale back carbon emissions by restricting supply. The result has been a rise in energy prices, profits and soaring energy-company stocks. Since Joe Biden took office in January 2021, shares of ConocoPhillips have greater than doubled to $108 per share, far outperforming the Standard and Poor’s 500 index of enormous company stocks.
Furthermore, DeSantis’s market-related policies may not deviate much from Trump who during his 4 years in office where the previous President cut taxes, reduced regulations but additionally picked fights with big businesses like Amazon founder Jeff Bezos, who owns the Washington Post, and AT&T, which until recently owned the left-leaning CNN cable network.
DeSantis has famously feuded with Disney over its attacks against a state law that bans teaching sex education to toddlers. Strategas places Disney among the many 19 DeSantis “loser” stocks.
That said, the four-page report is an indication that Wall Street increasingly believes DeSantis could win the White House in 2024, and that clients should begin planning their portfolios to profit from his policies.
Likewise, they need to avoid and “short” or bet against stocks that may face DeSantis related headwinds, or those Strategas includeed in its “DeSantis loser basket.” These are corporations that Strategas says adhere to “woke,” corporate policies, just like the aforementioned Disney. Other corporations in that basket include “vaccine makers,” people who embrace so-called Environmental Social Governance or ESG investment policies, and people with substantial operations in China.
Recall how DeSantis took on Disney though it was one among the state’s largest employers but lost a serious tax subsidy due to its opposition to the sex-ed law by removing its favorable tax status within the state. Strategas says DeSantis will probably use the Disney template nationally against corporations that adopt similarly left-wing policies including an embrace of so-called Environmental Social Governance or ESG investing.
ESG promotes the reduction within the carbon footprint of asset-managers’ portfolio corporations and other progressive political stances. But these mandates have increasingly come under attack from GOP elected officials who say it has led to higher gas prices and pushes a left-wing political agenda.
As governor DeSantis has recently targeted BlackRock, the world’s largest asset manager that has been on the forefront of ESG, pulling $2 billion in state money that was being managed by the firm. Strategas sees additional national regulations curtailing ESG if DeSantis gets elected. Because ESG investments often charge higher management fees than other stock-picking methods, BlackRock becomes a “loser” as those recent regulations could depress profits.
Also on the loser list is Amazon and Apple, two corporate whipping boys of the correct because they’re seen as woke Silicon Valley enterprises which have stifled conservative speech. Apple, meanwhile, has substantial manufacturing ties to China. Corporations with ties to China are seen as “losers” within the Strategas report, given the nation’s geo-political ambitions and its role within the Covid pandemic.
DeSantis has been meeting with enthusiastic financial industry fundraisers, who imagine he can beat Joe Biden or every other Democrat, while Trump can’t. AP
Meta, the holding company for Facebook, makes the loser list as well for censoring conservative opinions. Drug makers Pfizer and Moderna turn out to be DeSantis losers as well; Strategas sees a DeSantis administration as far less draconian when it comes to COVID vaccine mandates, thus these corporations will see falling profit margins. His Justice Department might also pursue claims that the businesses inflated their efficacy, the report says.
The 19 DeSantis winners are stocks within the border security, defense and energy sectors, Strategas said. “We expect DeSantis to be a powerful proponent of fossil fuels, but he is just not against renewables,” the report added. “Other areas where DeSantis may very well be a positive are financial corporations that avoid ESG and may benefit from deregulation.”
Of the latter, the massive bank JP Morgan run by CEO Jamie Dimon, who has publicly criticized ESG, makes the list of stocks that may win under a President DeSantis. Defense manufacturers Lockheed Martin and Raytheon Technologies are winners as well because DeSantis is seen as increasing the defense budget.
An organization named CoreCivic Inc., that owns and manages private prisons, could see its business expand dramatically — and its share prices soar — as DeSantis focuses on policies to secure the southern border from migrant surges and the corporate advantages from government contracting
SoFi Technologies makes money processing student loans. A possible lift to its business, Strategas says, will probably be the top of President Biden’s student-loan forgiveness program under DeSantis. Meaning more fees for processing those loans. Strategas also predicts that President Joe Biden will announce his plans to run again in 2024 after tonight’s State of the Union speech.