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What the Next Presidential Term Holds for the Markets

What the Next Presidential Term Holds for the Markets What the Next Presidential Term Holds for the Markets

The weeks following the November Presidential election that will run up to an impending fiscal cliff, where tax hikes and budget cuts come due, can be summed up with one word: volatility, according to new research from Cetera Financial Group. But both a Democrat or Republican presidential victor will likely have a sway on the markets. Here's a look at how Cetera sees certain sectors faring after the November election.

Consumer Discretionary Consumer Discretionary

If Obama wins:

New home builders will see support, as policies move to keep troubled home owners in place, leading to limited supply of existing homes.

If Romney wins:

Home improvement retailers will benefit from increased consumer spending. All retailers should see a boost.

Consumer Staples Consumer Staples

If Obama wins:

Drugstores may be boosted as more insured patients fill prescriptions. Areas of uncertainty include tobacco, because of Obamacare, and food pricing, with new emphasis on labeling by the FDA and package sizing.

If Romney wins:

Lower inflation in food and fuel prices, after less reliance on quantitative easing from the Federal Reserve results in less printing of money.
Lower emphasis on corn-based ethanol subsidies.

Energy and Utilities Energy and Utilities

If Obama wins:

Renewable energy will get a push.
Other areas that will see a boost include EV hybrid automakers, lithium battery makers and miners, and natural gas.

If Romney wins:

Drillers, Big Oil and Oil Services companies will come out on top with plans for U.S. energy independence.
Others areas that will benefit include pipeline companies and MLPs.
Auto fuel prices may go down.

Financials Financials

If Obama wins:

Large cap investment banks could see a boost.
A 0.03% financial transaction tax plan could be put into effect.

If Romney wins:

Large cap investment banks will also see a boost.
Reduced Dodd-Frank reform oversight could boost mid-cap and regional banks, as well as other financial services firms.

Health Care Health Care

If Obama wins:

Health insurers could reap more profits as they roll out to the newly insured.
Generics and drug distributors may see a boost.
Care may generally cost more.

If Romney wins:

Medical device makers may see a boost when they are not subject to a 2.3% excise tax.
Any change to Obama's health care legislation could result in more competition, such as unbundled care with lower premiums.

Industrials Industrials

If Obama wins:

Tax credits will encourage the use of energy-efficiency programs in construction and manufacturing.

If Romney wins:

Defense contractors could see a boost and the space program could be renewed.
Consumer confidence could lead to new growth in infrastructure and rails, trucking and freights.

Materials Materials

If Obama wins:

Precious metals may continue to see a boost.
More EPA regulations could weigh down manufacturing.

If Romney wins:

Coal, mining and steel may prosper.

Technology and Telecom Technology and Telecom

If Obama wins:

Diagnostic and medical record technology companies will benefit from increased spending on research and development.
An emphasis on the fiber buildout will help large-cap broadband firms.

If Romney wins:

A research and development tax credit could be revived, which could boost certain subsectors.
New tax policies could bring large tech profits back to the U.S. from overseas.

The weeks following the November Presidential election that will run up to an impending fiscal cliff, where tax hikes and budget cuts come due, can be summed up with one word: volatility, according to new research from Cetera Financial Group. But both a Democrat or Republican presidential victor will likely have a sway on the markets. Here's a look at how Cetera sees certain sectors faring after the November election.

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