Despite the fact that pretty much every expert warns against trading based on election predictions—people obviously do it anyway.

Once investors decide that a candidate is more likely to win the White House, they throw their money at specific sectors that could profit from more favorable economic policy over the next four years.

We already saw this phenomenon play out after President Joe Biden’s campaign-ending debate performance back in June, when the “Trump Trade” lifted sectors that would theoretically benefit from conservative policy.

But a lot has changed since then. Now, with polling and prediction markets suggesting that VP Kamala Harris is in the lead over former President Donald Trump, we’re seeing the “Harris Trade” rear its head.

The so-called “Harris trade” is a two-part development. First, investments that would theoretically be boosted by Trump fell over the past few days, such as cryptocurrency, energy, and financials. Second, equities that generally benefit from more progressive economic policy are rising.

Solar companies have gotten a boost over the past few days, for instance, with stocks like First Solar up 12% over the past five trading sessions and SunRun rising 6.21% in the last week.

Of course, movement in these sectors isn’t just because of presidential polling. But gains in the clean energy sector make sense, given that Democrats have proposed legislation to subsidize a green energy transition.

Should you jump into the Harris Trade?

We’ve said it once, and we’ll say it again: Analysts frown upon trading based on polling or prediction market odds—and for good reason. The truth is, even if Harris does win, a split government could make legislation painstakingly difficult to pass.

"We continue to caution against leaning on the “Harris trade” except as a short-term vogue, and against thinking there’s some sort of one-party “wave” building - today, there isn’t, and the debate doesn’t change that," explained Pangaea Policy founder Terry Haines.

UBS’s ElectionWatch analysts currently have the odds of a full Blue Sweep at 15%, a Harris win with a divided Congress at 40%, a red sweep at 35%, and a Trump win with a split Congress at 10%.

And don’t forget, the sectors that jump during a presidential term can be counterintuitive. Just look at the sector that’s currently up: solar. Global X’s Solar ETF (RAYS) has been performing terribly over Biden’s term, down 50% over the past year. Meanwhile, fossil fuel companies have gained more under Biden than Trump.—LB

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🟢 What’s up

• Campbell Soup Company climbed 2.63% on the news that, after 155 years, it will change its name to The Campbell’s Company. No soup for you!
• Wells Fargo somehow gained 2.37% after a US banking regulator declared its safeguards against money laundering weren’t strong enough.
• Lululemon Athletica popped 2.54% after CEO Calvin McDonald bought more shares of the company, signaling confidence in the struggling retailer.
• Uber drove 6.45% higher thanks to a deal with Alphabet’s Waymo to offer driverless taxi rides in Austin and Atlanta starting next year.
• RH rose 25.46% a day after announcing shockingly strong earnings for the home-furnishing retailer.
• Trump Media & Technology Group soared 11.79% on the former president’s announcement that he’s “not selling” his shares of the company.

What’s down

• Adobe dropped 8.47% after beating top and bottom line forecasts last quarter but projecting weaker than expected earnings next quarter.
• Garmin tumbled 5.12% after Barclays analysts downgraded the stock and cut their price target, citing the device-maker’s weak sales and low profit margin.
• US-listed shares of Chinese retailers like Alibaba and PDD dropped 0.93% and 2.40%, respectively, on the news that President Biden announced the US will crack down on cheap goods from China. Etsy, which competes with these retailers, popped 7.56% on the news.
• ViaSat sank 14.58% thanks to a deal between United Airlines and SpaceX to use Starlink satellites to provide free in-flight WiFi instead of ViaSat’s products.

"The message was clear that the tentative agreement we reached with IAM leadership was not acceptable to the members. We remain committed to resetting our relationship with our employees and the union and we are ready to get back to the table to reach a new agreement."

Looks like Boeing’s PR team is working overtime on a Friday. 33,000 members of the International Association of Machinists and Aerospace Workers union have walked off the job and onto the picket lines in a major strike that will likely give Boeing’s new CEO Kelly Ortberg even more headaches than she’s already got.

A tentative agreement between Boeing and the union was struck last week that included a 25% pay increase over the next four years for the machinists. But 95% of the union members voted against the deal, believing they deserve closer to a 40% raise.

Considering Boeing hasn’t earned a profit since 2018, it’s difficult to imagine where the company will find that kind of money, but with shares down over 35% in 2024, it better come up with the cash quickly.

Those of you who prefer your caffeine in the form of canned flavored bubbly water over delicious, warm coffee (we can’t imagine why), have taken grocery store aisles by storm over the past few years.

Energy drink sales have increased by 78% between 2018 and 2023, according to market research group Mintel, and the industry is on track to grow into a $30 billion market over the next five years.

While Monster Energy is still the biggest player in the market, along with privately-owned Red Bull, dark horse Celsius is slowly but surely carving out its own niche in the colorful world of energy drinks.

So, which should you invest in?

Both products can put a pep in your step, but both stocks have looked lifeless this year.

Celsius is down 43% in 2024, while Monster has sunk 14%. They’ve both suffered from an overall consumer spending slowdown over the past few quarters thanks to sticky inflation.

As the smaller company, Celsius has more wiggle room to grow—and the stock’s recent decline has brought it back down to Earth from overvalued levels.

Celsius also has a slightly different angle that has won over loyal customers. It differentiates itself as a “healthy” energy drink alternative that is lower in calories and used for exercising. Not to mention that, in its most recent quarter, it beat on both earnings per share and revenue expectations.

The only thing harder than getting to the top is staying there, and Monster isn’t growing at the same rate as its younger, hungrier competitor. But it also has the advantage of brand name recognition, given it’s been a convenience store staple for decades. Last quarter, Monster missed earnings and revenue projections.

Overall, more analysts have a “buy” rating on Monster than any other rating, and the general consensus on Wall Street is a bullish “overweight.” Celsius, too, also has an “overweight” rating, with most analysts rating the stock a “buy.”

So, if you’re looking to energize your portfolio, there’s no reason you can’t invest in both.—LB

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• The national debt is growing to an unwieldy size ($35.5 trillion) and now we’re beginning to feel its effects: The interest payment on the US debt topped $1 trillion for the first time ever.
• Consumer sentiment hit a five-month high as Americans look ahead to lower inflation and interest rates, but sentiment remains well below its 2021 peak.
• NFL owners recently voted to allow private equity firms to buy stakes in their franchises, and the first few teams considering offers are the Eagles, Dolphins, Chargers, and Bills.
• The yield curve un-inverted, but there’s always another recession indicator out there warning of a downturn ahead.
• The cryptocurrency Wild West is still alive and well: Americans lost $5.6 billion in crypto scams last year, according to the FBI.
• Credit card debt hit 10.9%, its highest level in 12 years, according to Deloitte.

Next week we’ve got a cornucopia of housing data: the Homebuilder Confidence Index on Tuesday, Housing Starts and Building Permits both on Wednesday, and Existing Home Sales on Thursday.

But those are small fries next to the big kahuna: The Federal Open Market Committee makes their interest rate decision on Wednesday. It’s all but certain that a cut is coming, but whether it’s 25 bps or 50 bps remains to be seen—though all indications right now point to a smaller cut.

Major earnings reports are few and far between next week, with only a handful of big names announcing their quarterly results.

Tuesday: TD Ameritrade

Wednesday: General Mills

Thursday: Darden Restaurants, FactSet, Cracker Barrel Old Country Store, FedEx, Lennar, and Scholastic.

Friday: British American Tobacco