Franklin Templeton Research Institute chief market strategist Stephen Dover said
a divided U.S. government could lower the odds of large-scale legislative reform
but would not necessarily reduce policy uncertainty. He warned heightened
confrontation between Congress and the White House could increase market
volatility, particularly for firms sensitive to international trade, government
spending and regulation. Healthcare companies may face tougher scrutiny on drugs
pricing, insurance costs and public health-insurance reimbursement. Financial
institutions could face stricter congressional oversight. Defense contractors
are exposed to shifts in spending priorities. Energy firms, including renewable
developers, would be sensitive to changes in regulation and federal incentives.
