Hot Money Monday: Albo has clinched it, here's where the smart money could be heading

News.com.au

04-05-2025

Labor has won, which sectors will benefit?
Property is in focus, so is climate and even gas
Rare earths and green metals now in the national spotlight
The sausage sizzles are cooling, the campaign signs are packed up, and Albo's back in The Lodge.
Now comes the real question: What does it all mean for Australian investors?
One thing's clear, we're not in for the U-turns you might get with a fresh face in charge.
But with a new mandate, larger majority and some big-ticket promises, Labor's win could give investors a few clues on where the wind might blow next.
What could benefit under Albanese's new term?
Housing was a headline act on Labor's ticket, they pushed hard for more roofs over more heads.
That could be good news for builders, developers and the companies flogging tiles and timber.
This could include stocks like Stockland (ASX:SGP), Mirvac (ASX:MGR), and even back-end suppliers like Bunnings, which is owned by Wesfarmers (ASX:WES).
And if rates start sliding in May and later this year, the housing pulse might just beat even stronger.
That's good news for the banks too. More certainty and support for homebuyers means more confidence, more borrowing, and a smoother run for the big four.
Elsewhere, climate and renewables will likely still be front and centre under Albo.
Solar, wind, grid upgrades, green hydrogen, they'll stay on the agenda now that he'll be at the helm for another three years.
But don't expect a smooth runway, experts said. If Labor has to cut deals in the Senate, those targets could be watered down.
That means green stocks could still ride the wave, but there could be some chop.
And despite the climate focus, Labor's still backing gas as a transition fuel, same as the Coalition.
"...The support for gas output by both of the major parties will probably offer some support to providers like Woodside Energy Group (ASX:WDS) and Santos (ASX:STO)," said Bloomberg's Richard Henderson.
Critical minerals
With the US trying to cut its reliance on China (which controls the lion's share of global supply), it's leaning on friends like Australia to fill the gap.
Labor has proposed a five-point plan to tackle Trump's tariffs, which Albo called "unjustified".
Part of that plan includes establishing a national critical minerals reserve, a pretty clear signal that these resources are now seen as strategic, not just economic.
So companies digging up this stuff, especially those with US links, could indeed find themselves in the spotlight.
The government's Future Made in Australia Fund is also backing critical mineral players in a big way, $1.5 billion all up, with nearly half going to green metals.
Another $2 billion has been set aside through the Green Aluminium Production Credit, and $1 billion is aimed at kickstarting a homegrown green iron industry.
What about the ASX itself?
Here's the thing. Historical data shows it barely matters who wins.
Since 1980, stock market performance under Labor and the Coalition has been neck and neck.
Labor's governments have returned an average of 45.2% per term, Coalition 32%. But median returns are nearly identical.
Coalition governments presided over fewer GDP contractions, while Labor can claim stronger average GDP growth.
Corrections and bear markets are pretty evenly split, mostly caused by global shocks anyway.
Bottom line: watch the sectors, not the politicians.