Written by: Zhao Ying
Source: Wall Street Journal
With Biden announcing his withdrawal from the 2024 US presidential election, Vice President Harris has become the "hottest candidate" for the Democratic presidential nomination. Although Harris has not officially announced her candidacy, investors have begun to pay attention to the economic policy changes she may bring.
According to media reports on Tuesday, some analysts believe that Harris's advocacy may be more progressive than "Biden Economics", such as holding a more radical stance on clean energy issues.
Similar to Trump, Harris also advocates tax cuts, but she supports tax cuts for middle- and low-income people. As for the rich and companies, she hopes to increase taxes. In terms of exports, Harris opposes trade protectionism and hopes to promote US exports.
Vasu Menon, managing director of investment strategy at OCBC Bank, believes that a Harris win in the U.S. presidential election would be positive for the market. Under a Democratic Party, the Federal Reserve can continue its monetary policy with "political continuity and less policy uncertainty."
In addition, Harris is also a sophisticated investor whose investment strategy is characterized by diversification and low risk. The Harris couple's investment portfolio is mainly composed of diversified index funds. According to the government office report submitted in May 2024, the total assets of the Harris couple's retirement accounts, other investments and cash assets are between 2.9 million and 6.6 million US dollars.
Of this, cash or money market accounts account for a considerable proportion, about $860,000 to $1.77 million. In terms of fund investment, Harris's largest holdings include a Target Date 2030 ETF, with a holding size of $250,000 to $500,000, as well as an S&P 500 index fund and a large-cap growth fund. Her husband mainly invests in ETFs from Vanguard, BlackRock and Charles Schwab.
Here are her policy proposals:
1. Advocate for tax cuts for middle- and low-income groups
During the campaign, Harris proposed providing a $500 monthly tax credit for people making less than $100,000 to replace Trump's 2017 tax cuts, a legislative proposal known as the Middle Class Lift Act.
She also plans to raise estate taxes to fund a $300 billion teacher pay increase plan, which is called "the largest federal investment in teacher salaries in American history," which differs from Biden's proposal to raise corporate tax rates.
Analysts say that if the middle class benefits, the consumer sector and small-cap consumer ETFs may benefit.
2. Strengthening U.S. exports
Harris, who has criticized Trump's trade policies and emphasized strengthening U.S. exports, opposes Trump's tariff plans, saying they will increase consumer spending on items such as gasoline and groceries, affecting middle-class families.
During a Democratic primary debate in late 2019, Harris said she supported promoting U.S. exports and declared, "I am not a protectionist Democrat."
If Harris is elected, large U.S. multinational companies and large-cap ETFs may benefit. Large multinational companies tend to have a wide global coverage and are export-centric.
3. Support clean energy
Similar to Biden, Harris's stance on climate and energy policy is particularly clear.
A key achievement of Biden’s term was the signing of the Inflation Reduction Act (IRA), the largest climate spending bill in U.S. history, which could reduce greenhouse gas emissions to 42% below 2005 levels by 2030.
As vice president, Harris has supported the Biden administration's climate policies, including the passage of the Inflation Reduction Act. She advocated for $20 billion for the EPA's Greenhouse Gas Emissions Reduction Fund to support clean energy development.
In addition, Harris has emphasized strengthening regulation of oil companies and other polluting enterprises. She has filed lawsuits against several fossil fuel companies, sued a pipeline company over oil spills, and launched an investigation into whether ExxonMobil misled the public on climate change.
4. Advocate for reducing housing burden
Harris attaches importance to the affordability issue of American residents. She has proposed the Rent Relief Act to provide tax credits for tenants with annual incomes below $100,000, which may benefit the U.S. real estate industry.
5. No clear stance on cryptocurrencies
Harris does not have a clear stance on cryptocurrencies for the time being. Unlike other politicians in Congress, Harris has never expressed a position on digital currency, tokenization, blockchain, or NFTs.
However, some analysts believe that Harris is likely to continue Biden's policies because her political base is connected with Biden and most of Harris' supporters come from Biden's camp.
6. Be cautious about AI
It can be seen from previous speeches that Harris holds a cautious attitude towards AI.
Harris has said that when government agencies use artificial intelligence tools, they are now required to verify that those tools do not endanger the rights and safety of the American people.
Harris met with executives from several leading U.S. technology companies in the first half of the year to discuss some key issues in artificial intelligence. She once said that President Biden "expects companies like yours to ensure the safety of their products before making them available to the public."
7. Be open about marijuana
Harris has called for changes in marijuana policy, criticizing restrictions on it as "ridiculous." She urged the U.S. Drug Enforcement Administration (DEA) to revise the current marijuana classification and stressed the need for swift action and continued efforts to reclassify it. If Harris becomes a presidential candidate, U.S. marijuana stocks will benefit.
