Stocks on Wall Street look set for a volatile session ahead on Wednesday as results of the U.S. presidential election between Donald Trump and Joe Biden rolled in without a clear winner yet. Nevertheless, Trump has already claimed false victory and demanded that no more votes be counted.
The market is facing a period of uncertainty and turbulence in the near-term as voting results in key swing states Michigan, Wisconsin and Pennsylvania could take days to determine.
Regardless of a Trump or Biden win, the three election-proof stocks below are well worth considering in the current environment:
1. Moderna: COVID-19 Vaccine Frontrunner
Biotechnology company Moderna (NASDAQ:MRNA) has seen its shares easily outperform the broader market this year, climbing more than 250% in 2020, as it emerged as one of the frontrunners in the race to get a COVID-19 vaccine approved and out to the public.
Its vaccine candidate, mRNA-1273, is currently going through late-stage clinical trials in the United States as the biotech firm continues to move toward possible emergency approval of its experimental vaccine by the end of this year.
The stock—which at one point surged by as much as 385% this year—closed at $69.08 on Tuesday, giving the Cambridge, Massachusetts-based company a valuation of roughly $27 billion.
When Moderna reported mixed third quarter earnings on Oct. 29, the company said that it plans to release its final-phase clinical trial data in the second half of November. It then expects to quickly seek emergency approval, assuming the data are positive.
"I believe that if we launch our Covid-19 vaccine, 2021 could be the most important inflection year in Moderna's history," Chief Executive Stephane Bancel said in the earnings release.
Regardless of who is in the White House, rolling out a nationwide coronavirus vaccination program will remain at the forefront of ongoing efforts to curb the spread of the pandemic.
2. Microsoft: Big Tech Dodging Regulatory Crosshairs
Microsoft (NASDAQ:MSFT) has been flying high this year, with the tech behemoth enjoying a surge in demand for its cloud-based offerings given the widespread shift to working from home amid the pandemic.
The Redmond, Washington-based software giant has seen its stock jump roughly 31% since the start of the year. Shares, which hit a record high of $232.86 on Sept. 2, settled at $206.43 yesterday. With a market cap of $1.56 trillion, Microsoft is currently the world’s second-most valuable company.
Microsoft’s financial results for its fiscal first quarter—released on Oct. 27—smashed expectations thanks to a strong performance in its booming cloud-computing business.
Revenue from Microsoft's Intelligent Cloud business, which includes Azure, GitHub, SQL Server, Windows Server and other enterprise services, climbed 20% year-over-year to $13 billion in the three-month period ended September.
The company should continue to do well in the current environment, regardless of the election outcome, with the upcoming Nov. 10 release of its next-generation Xbox console expected to further boost revenue in the quarters ahead.
The fact that Microsoft is not currently under any extra heat from antitrust regulators and politicians—unlike the other big-name tech stocks such as Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL), and Facebook (NASDAQ:FB)—should also bode well for it.
Despite lofty valuations—the tech giant's stock is trading for well over 30 times trailing 12-month earnings—Microsoft still looks like a good bet going forward, considering the strong demand for its cloud-based services, which has made it one of the true leaders in its field.
3. Caterpillar: Post-Election Stimulus Beneficiary
Caterpillar (NYSE:CAT), which is the world’s leading manufacturer of construction and mining equipment, is widely considered as a bellwether for the global economy.
It has seen its shares jump by around 14% this year, better than the comparable returns of both the Dow Jones Industrial Average and the S&P 500. Even more impressive, shares of the industrial machinery maker have nearly doubled from their mid-March bear market low, rebounding 91%.
CAT’s stock ended at $167.69 last night, not far from an all-time high of $171.26 reached in mid-October. It has a market cap of roughly $91 billion.
Caterpillar reported solid third-quarter results on Oct. 27, beating expectations for both earnings and revenue, despite the uncertain economic environment brought on by the COVID-19 pandemic.
“I’m proud of our global team’s performance as we continue to safely navigate the pandemic while remaining firmly committed to serving our customers,” CEO Jim Umpleby noted in the company’s earnings release.
Looking ahead, Caterpillar expects fourth quarter sales to be slightly higher than in the third quarter, given the modest economic recovery.
No matter who ends up winning the presidential election, the Deerfield, Illinois-based machinery giant is likely to be a key beneficiary of any post-election fiscal stimulus bill aimed at supporting the economy amid the ongoing coronavirus pandemic.