Joe Biden with an advantage. Is it time for clean energy producers actions?

Według PredictIt.org, in the 2020 presidential campaign, Joe Biden is 15 points ahead of Donald Trump; the difference became apparent as the public increasingly negatively assessed how the Covid-19 crisis was managed. For Biden's potential win, however, the fact that PredictIt believes there is a 58% probability that the Democratic Party will take over the Senate and easily win the upcoming elections is more important. If this is the case, the United States may be ready for four years of drastic reform.

About the Author

Peter potter - director of equity markets strategy in Saxo Bank. Develops investment strategies and analyzes of the stock market as well as individual companies, using statistical methods and models. Garnry creates Alpha Picks for Saxo Bank, a monthly magazine in which the most attractive companies in the US, Europe and Asia are selected. It also contributes to Saxo Bank's quarterly and annual forecasts "Shocking forecasts". He regularly gives comments on television, including CNBC and Bloomberg TV.

One of the pillars of Biden's administration is climate policy. This topic was neglected by the Trump administration, as a result of which the United States abandoned the 2016 Paris Agreement and repealed many environmental laws (the so-called Recovery act) introduced during the Obama term. During the National Convention of Democrats 2020, Biden presented a climate policy project entitled "Ecological Energy Revolution", for which the federal government would spend $ 10 trillion in the next 1,7 years, ignoring the expenditure of individual states and the private sector. Part of this plan is to ensure that by 2050 at the latest, the US is a 100% green energy economy with net carbon dioxide emissions zero. In the case of utilities, the border will be 2035.

If the Democrats do achieve an overwhelming victory, it means big changes for some sectors of the US economy. The oil and gas industry will lose out, and strict regulations will most likely be a problem for the financial industry. It also likely marks the end of Trump's 2017 tax cut. Winners will include companies or industries that offer solutions that put the United States on the path to a XNUMX% green energy economy. This can be a positive boost for producers of electric vehicles, solar and wind energy, waste management and recycling, water saving solutions, etc.

In early January, we published an article titled "Shares of clean energy producers are the newest megatrend on the market"; so far, its assessments of the positive approach to "green" actions have been found to be correct. The basket of shares mentioned in this article gained 2020% in 44, and as much as 2015% since January 230, easily taking the lead in the global stock market.

In the long term, we remain positive about the 'green shift' as the coming years will show that the Covid-19 crisis is of little importance compared to the long-term impact of climate change. There will be political capital mobilization and the coal economy will be fought in a similar way to the tobacco industry today. Oil and gas remain essential and will play a key role in enabling society to move towards a cleaner energy future; In our opinion oil prices They will most likely increase significantly from current levels as excess inventory is used up.

Long-term investors should consider exposure to clean energy equities. The table below shows the shares of 28 companies in the S&P Global Clean Energy index by market capitalization, including both producers of clean energy and green energy technology and producers of related equipment.