Clean Energy ETFs Decline Amid Rising Trump Election Chances

Clean energy ETFs experienced significant declines last week as the odds for Donald Trump’s election surged. Thematic ETFs such as Nuclear Energy, Hydrogen Economy, Solar Energy, Alternative Energy, and Wind Energy saw drops ranging from 3.466% to 9.507%.

Among these, the Global X Hydrogen ETF fell by 10.759%, marking the most significant drop. The Sprott Uranium Miners ETF also saw a notable decline of 10.4%. The Invesco WilderHill Clean Energy ETF decreased by 7.44%, the ALPS Clean Energy ETF dropped by 7.08%, and the Invesco Solar ETF experienced a decline of 6.22%.

Trump’s Impact on Clean Energy ETFs

Donald Trump’s chances of winning the 2024 election have surged dramatically. Betting markets and political forecasts now favor him following his strong performance in the last debate against current President Joe Biden. Trump’s support received an unexpected boost after an assassination attempt on July 13th, which has only strengthened his base. In a surprising turn of events, President Joe Biden announced on Sunday that he will not seek reelection, further solidifying Trump’s position as the frontrunner.

Currently, Trump is a -200 favorite to clinch the presidency according to betting site BetOnline. In contrast, Vice President Kamala Harris is seen as a 2/1 underdog at +185. Other potential Democratic contenders include Michelle Obama, with odds at +2000, and both Michigan Governor Gretchen Whitmer and former Secretary of State Hillary Clinton, each at +2500.

Why Markets Think Trump is Bad News for Clean Energy ETFs

Trump has been a critic of clean energy initiatives and Biden’s Inflation Reduction Act, which provides tax credits for solar panel installations and EV purchases. If Trump wins and eliminates these incentives, the solar and EV industries could face significant challenges. Trump has also pledged to scrap offshore wind projects and has frequently railed against wind energy. He has claimed that windmills cause cancer, emit “tremendous fumes” during construction, and disturb marine life.

The biggest losers would likely be companies focusing on clean energy, such as solar, and companies that rely heavily on foreign trade or are foreign but trade in the U.S.

SolarEdge Layoffs

Adding more pressure on clean energy stocks are the recent layoffs announced by SolarEdge Technologies. The company stated it would lay off 400 employees, including 200 in Israel, to restore profitability and ensure financial stability. This is the company’s second round of layoffs this year, driven by a downturn in the market and the wider solar industry.

SolarEdge’s decision comes in response to excess inventory and a current downturn in the solar industry, particularly in Europe. The company’s shares were down 6.6% in premarket trading and have lost nearly 66% so far this year. In January, SolarEdge announced it would lay off about 16% of its global workforce to reduce operating costs. The company reported a net loss of $157 million in the first quarter, marking its third consecutive quarterly loss.

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Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.