The upcoming presidential election is expected to have a significant impact on the biotech sector, Evercore ISI said in a note dated Friday.
Traditionally, presidential nominations are not significantly influenced by the vice president. However, candidates can sometimes help (e.g., Obama-Biden) or hurt (e.g., McCain-Palin) a ticket. For Harris, her choice for vice president is expected to appeal to suburban voters, with Arizona’s Mark Kelly a likely candidate, according to Evercore ISI. The influence of the vice president is generally limited, and is likely to be even more so under Trump, though the vice president will be a prominent voice on populist issues.
The Importance of Health Care in Elections and the Trump 2.0 Effect
Health care remains a top issue for voters, especially in swing states, though it ranks below the economy and border security. Harris is unlikely to revisit Medicare for All, but reproductive rights are expected to be a major issue in her campaign. Given past challenges to repealing the Affordable Care Act, the GOP may have less incentive to try again. Both Trump and Harris are likely to address drug pricing, while maintaining a focus on tough negotiations over the individual retirement law.
The impact of the Trump presidency on the macroeconomy
Evercore ISI expects a rate cut before the election. If reelected, Trump could use the Fed as a political tool rather than fire Powell outright. A trusted Treasury secretary could serve as a domestic counterweight to inflationary policies like tariffs and immigration. A potential clash with the Fed could arise if Trump pursues those policies.
Possible election results
The Republicans are likely to take control of the Senate, with Democrats defending seats in several battleground states. The House outcome is less certain and could be a close contest. The presidency appears to favor the Trump-Vance ticket, but the Harris campaign still has time to dramatically change the dynamics.
While the vice president’s role may be limited, health care remains an important issue. Indeed, economic policies under a potential Trump presidency could create tensions with the Fed, and the outcome of the Senate and House elections remains uncertain. The overall impact on the biotech sector will depend largely on the specific policies and political dynamics that unfold after the election.
