A strong GOP showing in the midterm elections is probably good for energy
CNBC’s Jim Cramer said he expects a near-term rally in energy stocks if Republican candidates do well in Tuesday’s midterm elections and win a majority in at least one house of Congress.
Oil and gas companies should be among the “biggest winners” if that happens, Cramer said Monday night. He said that shares of oil service companies — such as Halliburton and SLB, formerly known as Schlumberger — should stand out in that scenario. Cramer’s Charitable Trust owns Halliburton stock.
“Next would be oil and gas producers … who need more pipelines to get their product to market,” Cramer added.
Outside of the energy sector, Cramer said Wall Street was likely to interpret Tuesday’s strong Republican performance as favorable for financials.
True, Cramer cautioned that Wednesday’s market reaction to the election results depends on what happens in Tuesday’s trading session. At Monday, all three major US stock indexes finished solidly higher — the move Cramer suggested was “the presumption of a Republican victory [Tuesday night] will certainly lead to higher share prices.”
“If the market continues to function [Tuesday] in anticipation of the Republican advance, you must be aware that we have already taken a great step,” he said, “and that may be all we are entitled to for now.”
Cramer said that if interest rates don’t come down or the outlook for corporate earnings doesn’t improve, “a lot of things will stay the same even when Congress changes hands.”
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