The hotly contested US election has produced some unexpected winners and losers in the stock market. As it looks more likely that the Democrats are about to claim the White House and the Republicans are likely to keep their grip on the Senate, investors have started calculating what it means for some big companies and growth stocks.
The biggest winners in the post-election rally are technology and healthcare stocks as the dividend mandate reduces the likelihood of major regulatory and fiscal changes that could hurt their growth.
Below we have shortlisted three stocks whose post-election gains provide some insight into the latest ideas of money managers and why other stocks in these sectors could benefit if this rally gains momentum.
1. Uber
The world's largest taxi service Uber (NYSE 🙂 and other gig-economy companies have won a crucial vote in California to from reclassifying their drivers as employees.
] Rather than full employee benefits, voters in the state preferred a move requiring companies to implement a leaner package that includes a guaranteed pay rate for when drivers have an assigned passenger, and a number of alternative health, disability and non-discrimination guarantees.
The result suggests the taxi drivers and delivery companies – including Lyft (NASDAQ :), Postmates Inc. and Instacart Inc – able to avoid complying with a California law that restricts the way they operate in the most populous state of the US
Uber shares rose 14% on Wednesday as investors welcomed the victory that this gig economy operators will help cut costs and keep their business models intact. After the rise, Uber stock is now trading where it was just before the pandemic. It closed at $ 40.99 on Wednesday, up about 30% this year.
2. United Health
Health insurers and drug companies also gained ground when it became clear that Democrats would not hold elections in a & # 39; & # 39; blue wave & # 39; & # 39; will sweep.
A dividend government means that reforms to drug pricing and drug reimbursement have no chance to proceed. To predict this outcome, investors sent shares of UnitedHealth Group (NYSE 🙂 up 10% Wednesday, while the world's largest health insurer closed at $ 354.56, adding to its 30% rise this year.
Goldman analyst Asad Haider said in a note quoted by Bloomberg that the divided government is positive for health insurance companies as the managed care industry is less at risk of a "major progressive public option" or an increase in corporate tax.
Before the election, the healthcare industry was trading at the largest price-to-profit rebate ever in the broader market. "The group is starting to become more investable again," he said.
3. Facebook
The stock of Facebook (NASDAQ 🙂 has also been given a big boost by the hope that the results of US elections will increase the risk of government regulation. social media industry.
The Wall Street Journal reported last month that Federal Trade Commission (FTC) employees are recommending the agency to open an antitrust suit against Facebook.
The FTC has spent more than a year investigating complaints that Facebook is using its powerful market position to stifle competition, as part of a broader effort by the US antitrust authorities to investigate the behavior of major technology companies. the report said.
During the Trump administration's four-year tenure, Facebook has come under increasing fire for violating user privacy and its role in spreading hate speech and disinformation across its network.
With Republicans likely to retain control of the Senate, it will be challenging to reach consensus on how to curb the power of big technology, and it is likely that the status quo will continue. FB shares were up more than 8% on Wednesday.
