“We are likely going to end up with a leaner inventory of foreclosed homes, which therefore creates demand for new homes,” Stovall said in a CNBC report.
- SPDR S&P Homebuilders ETF (NYSEArca: XHB)
- iShares Dow Jones US Home Construction Index Fund (NYSEArca: ITB)
The health care sector would strengthen on the influx of new customers. [Healthcare ETFs Hitting Resistance]
“Even though [pharmaceuticals]may take an earnings hit as a result of the fines, the mandate provides a very needed inflow of patients who were previously uninsured,” Stovall said.
- Health Care Select Sector SPDR Fund (NYSEArca: XLV)
- iShares Nasdaq Biotechnology Index Fund (NYSEArca: IBB)
Gold could also see more safe-haven demand on additional quantitative easing measures that would devalue the dollar. [Gold ETFs Jump as Investors Anticipate QE3]
“Gold would do better for all the wrong reasons,” Stovall added. “It would benefit from a lack of confidence in Obama’s economic turnaround and an expectation that the economy will need additional stimulus.”
If Romney manages to secure a win, dividend-paying stocks would likely do better because Romney plans to hold dividend taxes at the maximum 15%, instead of allowing the Bush-era tax cuts expire. [Dividend ETFs, the Fiscal Cliff and Potential Tax Hikes]
- Vanguard Dividend Appreciation ETF (NYSEArca: VIG)
- iShares Dow Jones Select Dividend Index Fund (NYSEArca: DVY)
Romney would also relax the government’s control over domestic oil and natural gas producers. Specifically, he would remove roadblocks to hydraulic fracturing and allow drilling on federal land and off the East Coast.
- SPDR S&P Oil & Gas Exploration & Production ETF (NYSEArca: XOP)
- iShares Dow Jones US Oil & Gas Exploration & Production Index Fund (NYSEArca: IEO)
Lastly, Romney could also curb restrictions imposed on the financial industry by the Dodd-Frank Act.
For more information on sector ETFs, visit our sector ETFs category.
Max Chen contributed to this article.
Full disclosure: Tom Lydon’s clients own SPY and GLD.