A New Market Theme: What Is the "Harris Trade"?
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A New Market Theme: What Is the "Harris Trade"?
Harris does not have a clear stance on cryptocurrency, and some analysts believe she is likely to continue Biden's policies.
Navigating Web3 tides with focused insightsBy Zhao Ying
Source: Wall Street Horizon
Following President Biden's announcement to withdraw from the 2024 U.S. presidential election, Vice President Kamala Harris has emerged as the Democratic Party’s frontrunner for the nomination. Although Harris has not yet officially declared her candidacy, investors are already assessing the potential economic policy shifts she might bring.
According to media reports on Tuesday, some analysts believe Harris’s policy positions may be more progressive than "Bidenomics," particularly with a more aggressive stance on clean energy initiatives.
Like Trump, Harris supports tax cuts—but specifically for middle- and low-income households. In contrast, she advocates raising taxes on wealthy individuals and corporations. On trade, Harris opposes protectionism and aims to boost American exports.
Vasu Menon, Executive Director of Investment Strategy at OCBC Bank, believes that a Harris victory in the U.S. presidential election could benefit financial markets. Under Democratic leadership, the Federal Reserve would likely operate under conditions of political continuity and reduced policy uncertainty, allowing it to continue implementing its monetary policy smoothly.
Additionally, Harris is an experienced investor whose investment strategy emphasizes diversification and low risk. The Harris household portfolio primarily consists of diversified index funds. According to government disclosure filings submitted in May 2024, the total value of the couple’s retirement accounts, other investments, and cash assets ranges between $2.9 million and $6.6 million.
Cash or money market accounts make up a significant portion—between $860,000 and $1.77 million. Among fund investments, Harris’s largest holdings include a Target Date 2030 ETF valued at $250,000–$500,000, along with S&P 500 index funds and large-cap growth funds. Her husband primarily invests in ETFs offered by Vanguard, BlackRock, and Charles Schwab.
Below are her key policy proposals:
1. Tax Relief for Middle- and Low-Income Households
During her campaign, Harris proposed providing monthly tax credits of $500 to individuals earning under $100,000 annually, replacing the tax cuts introduced by Trump in 2017. This legislative proposal is known as the "Middle-Class Tax Relief Act."
She also plans to raise the estate tax to fund a $300 billion teacher pay raise initiative, described as "the largest federal investment in teacher salaries in American history"—a departure from Biden’s focus on increasing corporate taxes.
Analysts suggest that if the middle class benefits, consumer sectors and small-cap consumer-focused ETFs could see gains.
2. Strengthening U.S. Exports
Harris has criticized Trump’s trade policies, emphasizing the need to strengthen American exports. She opposes Trump’s tariff proposals, arguing they increase consumer spending on essentials like gasoline and groceries, negatively impacting middle-class families.
In a late-2019 Democratic primary debate, Harris stated her support for promoting U.S. exports and declared, “I am not a protectionist Democrat.”
If elected, Harris could benefit large multinational corporations and large-cap ETFs, which typically have broad global reach and export-oriented business models.
3. Support for Clean Energy
Similar to Biden, Harris holds clear and strong positions on climate and energy policy.
One of Biden’s key achievements was signing the Inflation Reduction Act (IRA), the largest climate spending bill in U.S. history, projected to reduce greenhouse gas emissions to below 42% of 2005 levels by 2030.
As vice president, Harris has consistently supported the Biden administration’s climate agenda, including passage of the IRA. She advocates allocating $20 billion to the Environmental Protection Agency’s Greenhouse Gas Reduction Fund to advance clean energy development.
Moreover, Harris emphasizes stricter regulation of oil companies and other polluters. She has filed lawsuits against multiple fossil fuel firms, sued a pipeline company over oil spills, and launched investigations into whether ExxonMobil misled the public on climate change.
4. Addressing Housing Affordability
Harris places strong emphasis on housing affordability. She introduced the "Rent Relief Act," which offers tax credits to renters with annual incomes below $100,000—a move that could benefit the U.S. real estate sector.
5. No Clear Stance on Cryptocurrency
Harris currently has no clearly defined position on cryptocurrency. Unlike many lawmakers, she has never publicly expressed views on digital currencies, tokenization, blockchain, or NFTs.
However, some analysts believe she is likely to continue Biden’s approach, given her political alignment with his administration. Most of her supporters come from within Biden’s base.
6. Cautious Approach to AI
Based on her past statements, Harris appears cautious about artificial intelligence.
She has stated that when government agencies use AI tools, they must now verify that these technologies do not jeopardize the rights and safety of American citizens.
Earlier this year, Harris met with executives from several leading U.S. tech giants to discuss critical AI issues. She emphasized that President Biden “expects companies like yours to ensure product safety before releasing them to the public.”
7. Openness Toward Marijuana Legalization
Harris has called for reforming marijuana policy, criticizing current restrictions as “absurd.” She urges the Drug Enforcement Administration (DEA) to revise marijuana’s classification and stresses the need for swift action and sustained efforts toward reclassification. If Harris becomes the presidential nominee, U.S. cannabis stocks could benefit significantly.
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