The Bear Growls - 2020 Democratic Platform; Economic policies & the stocks that stand to gain.


In a continuing look at the investment implications for investors and traders of a potential Biden- Harris administration, we now turn to the platform’s economic priorities and likely winners and losers of the policies:

1) A federally mandated minimum wage, 12 weeks of paid family leave, & medical leave for all workers/family units. This would be a cost spread out across all of society but might create an under-employment situation as the competing economies and trading partners from less developed countries would have a consistent cost advantage over the U.S. benefiting large multi-national corporations at the expense of domestic manufacturers and employers.

2) A more progressive tax code, resulting in larger refundable tax credits for low and middle-income families, thereby shifting the burden of taxation up the income scale. Outside of the effect on the wealthy (reduced spending and investment), this would increase the disposable income for many, which would benefit consumer spending and positively impact consumer staples companies (food, clothing, and electronics, etc.) and consumer durables (autos, appliances, etc.).

3) Transportation and infrastructure, including high-speed rail and the repairing of existing roads, bridges, and airports. This would be a massive infrastructure program that would benefit large scale manufacturers of earthmoving equipment, asphalt, steel, concrete, and engineering companies, just to name a few.

4) Increase in affordable housing and “supercharge investment in the Housing Trust Fund to greatly expand the number of affordable housing units on the market.” This again would require much of the same as the above, moving equipment, steel, concrete, and engineering, and construction companies would benefit.

5) A new Homeowner and Renters Bill of Rights “to protect families from abusive lenders and landlords.” This would have a deleterious effect on lending firms, banks, builders and landlords as it would change the profit potential and business risks of those activities through the enforcement of tighter regulations and the associated higher costs to do business. One might consider points 4 and 5 at cross purposes.

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