Macquarie's 14 ASX stock picks for the US election

The US election is inescapable. So much so that more Australians probably know who the candidates for the US Presidential Election are than who the deputy Australian Prime Minister is! (That’s Richard Marles MP, in case you were wondering.)

Outside the saturation of politics, the outcome of the election does have some implications for Australian markets. This is why Macquarie’s most recent Australian Equity Strategy research note caught my attention. Combine that with Shane Oliver's excellent summary from early October, and perhaps all the drama is starting to make a little more sense.

Many Australian stocks have US revenue. For example, CSL, WiseTech or BlueScope. In addition, it's not a matter of universal consequence to these businesses. For instance, in one situation, healthcare and infrastructure stocks may be in a better position, but in the alternative, it could be financials and materials. In this wire, we'll summarise this very interesting research note.

The Livewire cheat sheet to Trump and Harris policies

This is by no means a comprehensive guide to the candidates' policies, but it reflects some of the pieces that might be most interesting to markets. Please note this table is a compilation of both Macquarie's and Shane Oliver's insights.

What does this actually mean for markets and sectors?

Broadly speaking, a Trump win is considered to be more positive for markets given his proposal for corporate tax cuts and protectionist approach to American businesses.

On a sector basis, it’s less positive for healthcare, particularly given that Trump has proposed removing the Affordable Care Act (and hasn’t proposed an alternative). Macquarie analyst Christine Trinh says, “A Harris win is likely to be more positive for Health stocks given the potential for increased spending on Health to improve access for a broader proportion of the US population.”

On a thematic basis, those companies with a specific climate change slant may also find a Trump victory more challenging, given expectations he will overturn efforts to reach net zero.

The resources and mining sector is anticipated to benefit from a Trump win, given his support for these, particularly oil, gas and uranium. Gold is expected to benefit regardless of who wins – if there is a clean sweep of both houses. 

If you are interested in hearing more about what the election might mean for gold, bonds and stocks, please read this wire from my colleague Carl Capolingua.

Analyst Andrew Bowler says, “A Harris win could initially be more positive for gold due to expected US Dollar weakness, while a Trump win could initially have the opposite effect (stronger US Dollar).”

The implications for Australian stocks off the back of this – and Macquarie’s picks

Macquarie tips a Trump win to be a positive on the whole for ASX stocks with more than 15% revenue exposure. Due to the prospective of higher corporate taxes, it suggests that a Harris win would be a negative for stocks - though not healthcare stocks as they should benefit from proposed increased spend in this sector.

It holds favourable views toward Block (ASX: SQ2), James Hardie (ASX: JHX), Light & Wonder (ASX: LNW). ResMed (ASX: RMD), Megaport (ASX: MP1), CSL (ASX: CSL), Amcor (ASX: AMC) and Aristocrat (ASX: ALL).

Analyst Peter Steyn notes that James Hardie “has little to no tariff-related risk… should benefit from taxation changes and is a likely recipient of benefit from housing-friendly policies on both side of the election outcome.”

Macquarie highlights that Australian banks typically have US revenue exposures and ANZ (ASX: ANZ) could benefit from its higher exposure to US Dollar deposits – though on the flip side, it has a greater Asian institutional presence which could be affected by tariffs.

Macquarie’s Research team also noted five other stocks that could benefit from the US election as they have over 50% exposure to US revenue streams. All of these stocks are rated OUTPERFORM by the broker.

These include: Pro Medicus (ASX: PME), Polynovo (ASX: PNV), Reliance Worldwide Corporate (ASX: RWC), Orora (ASX: ORA) and Computershare (ASX: CPU).