Later this year, America will have a new President. Who that will be is still to be determined and that lack of clarity isn’t good for the markets. Presidents who are in the final year of a second term are also often less predictable than they are in previous years. Markets don’t react as much in the final year of a president’s first term as incumbents are many times reelected. As 2017 begins, investors won’t have to guess who will be in power, however, a president’s first year in office is often as unpredictable as the last.
The outcome of this year’s presidential election will impact the fate of the energy sector as the two presumptive candidates, Democrat Hillary Clinton and Republican Donald Trump, have very different views on energy related topics. The U.S. has trended slowly away from fossil fuels and toward more efficient, renewable-based energy systems. The next U.S. president will have a significant influence on how the transition continues to unfold.
Mr. Trump has yet to provide an official view or stance on the energy sector in his campaign documents. He has however conducted several interviews regarding various energy related issues and voiced his opinions on energy policy, climate change, oil, gas, and the coal industry.
Mrs. Clinton seems to have a more solid energy strategy she plans to put in place if she is elected. However, many of her goals seemed aimed to fulfill or piggyback off the plans that current President Obama and his administration has worked to put in place over his term.
With such different viewpoints on almost every topic it is hard to anticipate how the energy industry and environmental policies will transform when the new President takes office come January. With that in mind, while markets are still somewhat stable it may be a good time to look into putting a long-term hedging strategy in place!