How a Trump or Harris victory could impact the market

And for more on why and to run us through the other trades, let's turn to Wolf's Chris Seneck. Chris, on a Harris win, I'm hearing a lot of optimism for retail stocks. This would be one of them. Yeah. Hi, Kelly. Thanks for having me on. So there's been an overhang recently, really since midsummer, with respect to the tariffs, right, and the impact on the retail stocks. And ELF produces a lot of their goods in China, clearly, along with other retail names, the dollar stores, Dick's Sporting Goods. You can kind of go down the list there. And a Harris win would certainly remove that overhang that's been persistent really since the summer and be a catalyst for these consumer names and discretionary probably more broadly. Any others you'd mention, kind of places you'd be looking to in the first scenario we described, which is a Harris win? And did you say a split Congress? It looks like- Split Congress. Yeah, the Democrats would be a little bit harder, but who knows at this point? Yeah, you know, the other big area is utilities, right? And because in a Harris win, we think you see a fall in long-term treasury yields. The recent uptick in the last month or so has been driven by the so-called term premium and rising Trump odds. And so I think yields fall. I think that benefits utilities that way. And then I also think the grain trade within utilities, you know, the names like Nextera, AES, the solar names, I think are the places to be, along with the tariff exposed names. So solar, green, China exposed tariff names, I think are the first initial trades that you want to think about that not only are a trade, but I think have a kind of longer duration theme to them in a Harris win, whether it's split Congress or whether it's a so-called blue wave. If they end up having a sweep, you would still kind of want exposure to some of those green energy names. Although, again, these things don't always turn out the way that we think. You'd also be selling financials. And I wonder what either a Harris win with or without the Democratic Congress would mean for stocks overall. I mean, we are probably talking about an increase in corporate taxes that could be 4 or 5 percent headwind for EPS. So it doesn't feel that consequential either way, but it's there. So what's interesting is financials and utilities sectors are up the same percentage year to date. And if we think about election outcomes, the two are the epicenter of kind of the torque trades in opposite directions, meaning that Trump win, regardless of whether the Congress is GOP controlled or divided, I think is very bullish for financials because of deregulation. And that could be done without any type of things passed through Congress, as you know. And then it's very negative for utilities. And yet the two sectors are essentially up the same amount year to date. So something's got to give there with respect to that. So in a Trump win, I think financials are by far the clearest winner because of the deregulatory aspect, more M&A, more capital markets, a steeper yield curve. The 10-year Treasury, we think, in a Trump win, regardless of what the composition of Congress is, probably rises 25 to 50 basis points. In a higher market level, I think it's, you know, absent some, you know, unanticipated event. I think the election itself, once we know the final results, is a clear an event and stocks push higher into year end, regardless of who wins. Interesting. OK. And you got Trump when you like the cyclicals, Harris when you like more of the tech and the secular growers. What do you think the message is from the market here today? It's clearly fading a Trump win and starting to price in a Harris one. What do you make of it? Yeah, I think today is the race tightening up right over the over the last five days. I think the old data, whether you believe it or not, is has tied into where it's nearly a tie by some measures. And we've seen today's the Harris trade. Solar names are up. Yields are down. Crypto is down. I think the market is telling you that it's gotten a lot tighter than it was perhaps a week or two ago with that. And that's the message we're seeing today in the markets and expect more volatility. Right. I mean, tomorrow could be the exact opposite based on how the wind's blowing. Absolutely. So fine. Just quickly. And finally, if we see a sell off as these results start to come in either way with that, that's when you say either outcome, you'd be a buyer. I'm a buyer today. Yeah. All right. Chris, thanks.