Group 3: How Will the Various Potential Outcomes of the US Election Affect the US/Global Equity Markets? Flashcards
1
Q
what is trump’s stance on energy
A
- he wants to support expanding oil projects between US and Canada
- 3 major projects include:
- keystone XL pipeline
- transmountain and Line 3 pipelines
- Alaska project
- wants to reduce dependence on oil imports from Russia and Saudi Arabia
- want to deregulate greenhouse gas emissions in the US energy sector to lower costs for domestic oil production, boosting profitability for energy companies
2
Q
what is the keystone XL pipeline and why does trump want it
A
- a pipeline that transports oil from alberta to refineries in the US
- trump believes it will increase energy independence and boost economic growth
3
Q
what are the transmountain and line 3 pipelines and why does trump want it
A
- other cross-order projects
- transmountain pipeline is going from alberta to BC
- line 3 expansion is from Canada to the US great lakes
- the projects are aimed to transport crude oil to US refineries, also reducing reliance on foreign oil
4
Q
what is the alaska project and why does trump want it
A
- the idea of expanding oil transporting projects to alaska
- would be delivering canadian oil to alaska
- would strengthen the US-Canada oil trade and make Alaska a key player in energy distribution
5
Q
why does trump want independence in the energy sector
A
- he wants to boost domestic productions
- this will increase US economic strength and maintain lower energy costs for consumers and industries
- reducing reliance from foreign oil (from russia and saudia arabia) he can make the US less vulnerable to price fluctuations from the geopolitical tensions
- hes willing to have these projects with canada due to the strong friendship and relations they have
6
Q
what is the impact on the US equity markets from trump’s stance on energy
A
- with deregulation, energy companies (mostly in oil and gas) would see higher profits
- because they are able to increase their production (since there is no restriction on greenhouse gas production)
- the stock prices of these companies would increase
- can also have job creation with more domestic production
7
Q
what is the impact on the global equity markets from trump’s stance on energy
A
- global oil prices would decrease since there is less demand for the oil exporting countries
- this would also then mean it would hurt the stock performance for those oil exporting countries, especially those that are reliant on oil revenues like russia and saudi arabia
- but these lower prices could also improve the profit margins for companies that consume large amounts of energy (transportation and manufacturing)
8
Q
what is harris’ stance on energy
A
- follows bidens administration approach
- strongly supports clean energy and climate action
- she wants to reduce reliance on fossil fuels as a long term goal and instead focus on renewable energy sources like solar, wind, and nuclear energy
- but she knows that there is a short-term need for domestic oil production
- but as she pushes for a cleaner energy future, the demand for canadian fossil fuel exports may decline in the long run but also open the door for cross-border investment in clean energy products
9
Q
how does harris’ stance on energy impact the us equity market
A
- increases investments in companies that are involved with renewable energy (EVs, solar, wind, etc.)
- there would be a decrease in demand for investments in oil and gas companies, as well as reduced profitability for those companies from the stricter regulations towards net-zero emissions
10
Q
how does harris’ stance on energy impact the global equity market
A
- because the US is a key player in setting global energy trends, if they decide to transition in clean energy, then companies in other countries would do the same
- meaning more investment in cleaner companies across the globe
- since she plans on going clean in the long run, Canada will see a declining demand for its oil in the long run especially since they would depend so much on the US
- similar to what would happen if trump takes office, countries that are dependent on oil and gas exports like saudi and russia would experience lower demand, negatively impacting their stock markets
11
Q
what are trade policies trump wants
A
- has that “made in america” mindset
- increasing tariffs
12
Q
what is the made in america mindset
A
advocating for american companies to bring production to the US and rely more on domestic suppliers
13
Q
what tariffs are trump planning to increase
A
- raising tariffs on all imports by 10%
- specifically targeting Chinese goods with tariffs up to 60%
14
Q
how does trumps trade policies affect the us equity market
A
- domestic manufacturers would see growth, so stocks in sectors that have local production would benefit
- industries that rely heavily on global supply chains would suffer from higher production costs (having to move them to america), causing companies to have lower profit margins
- the tariffs would also increase costs for companies that rely on foreign inputs
- also makes it more expensive for imported goods, reducing demand, hurting consumer discretionary stocks
- domestic producers that compete with imports would do better
15
Q
how does trumps trade policies affect the global equity market
A
- there would be lower demand for those countries that depend on exporting goods
- china exports $551B to the US would see much lower revenue and profits, dragging down their (china’s) equity markets
- Canada exports $438B to the US ^ similar thing would happen
