(CNBC) - Investors are obsessed with Democratic presidential candidate Elizabeth Warren.
Campaign manager Roger Lau said he’s happy that Wall Street bankers are “scowling into their catered breakfast,” but investment managers have been left wondering how they’ll bring home the bacon if Warren comes out on top.
Dozens of brokerages and market research firms have in recent weeks reached out to clients with ways to try to capitalize on a Warren election. And the consensus isn’t good for the stock market.
Most highlighted Warren’s distrust of Wall Street and corporate governance, a view many felt would lead to heightened regulation, muted earnings and an increase in government intervention if she wins in 2020.
While some areas of the market — like renewable energy companies — could see an uptick in business, many more feared that profits could take a hit across the U.S. economy.
Some, like Tom Essaye, founder of Sevens Report Research, took the opportunity to assess how each of Warren’s policy priorities could mean for corporate earnings and citizens of various income levels.
“It is a very reasonable statement that if Warren were elected, and these policies were enacted, it would be negative for the stock market in the extreme, because share prices are an expectation of future earnings,” Essaye wrote on Oct. 8.
“These policies would hurt corporate earnings universally, although they would likely improve quality of life for many demographics at the expense of corporate profits,” he added. “Whether that trade off is positive, or negative, I’ll leave you to decide.”
Others suggested specific tweaks to investor portfolios: More renewable energy and ESG-heavy funds. Downplay oil and fracking. Ditch drugmakers. Unlike Facebook.
Three sectors were of particular concern to Wall Street’s top stock strategists: drugmakers, energy and financials. Warren has historically bashed theses industries for what she views as a chokehold on health care, impact on the environment or underhanded lending practices, respectively.
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