5 ASX Stocks to Watch as the 2024 U.S. Elections Approach

The Presidential election of the U.S. for 2024 was set to occur on November 5th. The global financial market is paying close attention to the potential impacts on administration-level changes in the U.S. It can also influence the economies worldwide. With that said, the Australian Stock Exchange (ASX) is no exception. Political shifts in the United States will resonate with the changes in trade policies, commodity prices, and investment strategies. It is important to follow the trends of the stocks during crucial times like this,

How U.S. Elections Impact the ASX

As a predominant global leader in every aspect such as technology, finance, and defense. Changes in the policies can have consequential effects on international trade, currency exchange rates, and more. Key areas where the U.S. Elections might impact the ASX include:

• Trade policies – New administrations may alter trade agreements. This will affect the import and export dynamics.
• Commodity prices – Certain U.S. policies on infrastructure and environmental regulations can influence global demand for commodities such as iron ore and energy resources.
• Credence of investors – Political uncertainty will lead to wavering confidence in the stock market as an investment option for investors.

5 Stocks to watch

BHP Group (ASX: BHP)

BHP is one of the world’s largest mining companies. In the sector of mining and resources, their name is synonymous with the production of commodities such as iron ore, copper, and coal. The company’s performance is closely related to the global demand for these resources. If the new U.S. administration puts forth new infrastructural projects, the demand for raw materials like iron and copper will increase.

Prospective changes in the U.S.-China trade policies may affect commodity prices. As China is one of the highest importers of BHP’s products, any shifts could directly impact the company’s revenue. U.S. policies on climate change and the need for clean energy might influence coal demand thereby affecting BHP’s coal production.

CSL Limited (ASX: CSL)

A global biotech company that specializes in biomedicine products and vaccines has its largest market base situated in the U.S. The healthcare reforms and drug policy changes in the US can directly impact the CSL’s profitability. Their expertise in the pharmaceuticals sector with the assistance of research and development from the U.S. will also be greatly affected.

Through partnerships and alliances to create innovative opportunities in the field of biotechnology, CSL is currently drawing its support from the U.S. The regulatory environment formed over introducing technology to refine the pharmaceutical process may accelerate the CSL’s product launches.

Fortescue Metals Group Ltd (ASX: FMG)

Fortescue is a leading iron ore producer with the potential to supply to the ongoing demand for the resources and is also heavily exporting its produce to the global market. Their larger consumer base exists in China. Thus, if there is a disturbance in the global trade dynamics between the U.S. and China, there will be indirect impacts on Fortescue. Tariffs or trade disputes might influence China’s demand for iron ore.

U.S. plans for revamping infrastructure can increase global iron ore demand. This will drive up the prices of the resources. Since the demand is high, the companies supplying the demand will also profit from this need. Fortescue’s investment portfolio also includes various green energy projects that may align with the U.S. clean energy policies. This opens up new opportunities for the company.

Woodside Energy Group Ltd (ASX: WDS)

A major player in the energy, specifically the oil and gas sector, this company has its operations extending to various international sites. It also indulges in export activities that will strengthen its revenue margins. At a global level, the U.S. still holds a strong hand while determining oil and gas prices. Thus their policies on oil production will influence global oil price shifts.

Due to the geopolitical tensions, the relations between the U.S. with other oil-producing nations may affect supply dynamics. This will impact the export markets for Woodside Energy. When the U.S. eyes the renewable energy market for sustainability, Woodside’s long-term strategy for oil and gas production might be affected since there will be an increasing demand for fuels.

Macquarie Group Ltd (ASX: MQG)

It is a global financial services company with its operations spanning different sectors such as banking, asset management, and more. The interest rate changes followed by the U.S. Federal Reserve can affect global financial markets including the investment strategies of Macquarie Group. Their expertise in covering infrastructural costs will also be significantly affected if the U.S. brings forth changes in its policies.

Ideally, when the need for infrastructural revamping increases and when the interest rate is stabilized at a manageable point, the Macquarie Group could benefit through financing and advisory roles. Their service reaches not only Australian clients but also various nations. As they are highly scalable, any impacts be it good or bad is also scalable to a large extent.

Potential Changes to Consider: For Investors

It is however inevitable that these changes prevail in the market currently. Every country has to go through this political phase to be able to serve its citizens better. But when the U.S. undergoes such changes it tends to have a global effect. Companies involved in trade agreements and financial alliances with the U.S. will directly face the impacts. Thus, it is highly commendable when the companies and investors with ties to the U.S. closely monitor the situation.

• Different tariff rates or trade agreements will be followed by different administrations. This can impact export capacity and operation costs.
• There will be fluctuations in currency exchange rates due to the political uncertainty. This will ultimately affect international revenue for various companies.
• The confidence in stock markets will quiver amongst the investors. When the companies struggle to supply to the demand, the market will underperform.

Conclusion

As the 2024 U.S. Elections approach, investors should pay close attention to global market trends. There may be sharp movements in stock exchanges, including shares on the ASX. The dynamics of the market are influenced by global events, including political transitions. As the U.S. administration changes, shifts in the stocks affected by U.S. policies are plausible.

To mitigate potential risks, investors need to stay informed about decisions affecting their investment strategy. Although the outcome of investments can never be fully predicted, taking crucial steps to monitor and adapt can help avoid significant threats to portfolios.

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