Just checking - headwinds make things harder, tailwinds help move you forwards, making things easier, right? It's just that I would have thought @shadow that Labor being elected federally would provide tailwinds for education and childcare (as well as expanding and/or strengthening Medicare), particularly if they need support from the Greens to pass legislation, and renewable energy companies would see a much greater focus on addressing Climate Change and increasing climate change reduction targets as a tailwind, not a headwind, i.e. life becomes easier for them.
Regarding rare earths (or REOs), I think Australian producers of REOs (rare earth oxides) are more likely to be able to sell at higher prices when China is refusing to export their own REOs - or are restricting their exports, which drives the price up (as China are the largest producers of REOs globally). So not sure that a potential thawing of relations between Australia and China would provide a tailwind for REO producers based here in Australia (like Lynas/LYC). After all, we don't want to buy their (China's) REOs or sell ours to them. We just want to sell to other countries who are worried about their current reliance on China for their REOs. We want to provide a credible alternative. So China's relationship with those countries (like the US and Japan) are more important to the success of ASX-listed REO producers like Lynas than China's relationship with Australia.
I don't think Labor being in power federally makes much difference to the thermal coal industry, as Labor's position is currently that there is no real benefit in restricting the export of thermal coal from Australia because other countries would just step in and fill that void and it wouldn't make a jot of difference to global emissions and global warming. The coal would still get burned to create electricity, it would just be somebody else's coal. I won't comment on the merits of that argument (or point of view) however I think that under Labor we are more likely to see pressure to close down Australia's remaining coal fired electricity generation plants sooner - plants like the ones that AGL operate - AGL Energy was responsible for around 8 per cent of Australia’s total greenhouse gas emissions in 2020 - see here: Coal giant AGL again tops list of Australia's biggest emitters | RenewEconomy
So possibly a headwind for AGL and other energy companies who operate coal-fired power stations - and a tailwind for companies that are either the owners of renewable energy generation and/or storage assets or are building them - like Genex Power (GNX) who I hold shares in.
But thermal coal companies like Whitehaven and New Hope Coal are probably not going to be too bothered - Australia isn't a huge market for them - the export market is huge still - but certainly very likely to decline over time, regardless of who is in power here in Australia. The only question is how long that transition to fully renewable energy will take globally. It will happen at different speeds in different countries and continents, but it will happen. While I acknowledge that there is still money to be made in thermal coal, it's not a sector that interests me at all to be honest. But that's just a personal view and everybody has their own views and their own investable universe. I have chosen to reduce my own investable universe, but I don't tend to run out of great companies to invest in, so it's all good.
Regarding REITs, I think yield plays like REITs (companies that are owned predominantly for reliable income) will get sold down on interest rates rising and even just the prospect of interest rates rising, more than because of what happens with inflation, but then again interest rates will rise to combat rising inflation so in that sense rising inflation is bad for REITS because it means interest rates will rise. Rising interest rates means that at some point you'll be able to get a decent return from TDs again, and Term Deposits don't have the same risks as REITs (whose valuations are underpinned by property valuations), so people will naturally switch from higher risk to lower risk investments if they can get the same return from them. I think rising interest rates are generally bad for valuations (because the so-called "risk-free rate" is higher, so you generally need to buy shares at lower prices to get a return that is higher than the risk-free rate - to compensate you for the risk that shares carry) which will likely negatively impact the market's valuations of growth stocks the most, and cause a rotation from "growth" to "value" as we have seen in recent months. That's basically because "value stocks" are already considered to be cheap or more fairly priced, compared to "growth stocks", so the biggest falls are likely to be at the "growth" end of the market in that scenario. And rising interest rates will at some point also become bad for income stocks that don't have much or any growth, which could describe many REITs. That's just because TDs eventually become a viable alternative to "income stocks" (similar returns, less risk). But I don't think a change in the Federal Government is going to make a big difference one way or the other to interest rates - that's still down to our Reserve Bank, who tend to make their own decisions, right or wrong, regardless of who is in power.
I think the most obvious beneficiaries of this change of Federal Government are going to be renewable energy companies like Genex Power. Particularly because of the extra Greens that have now won seats and also the "Teal Independents", many of whom campaigned on the need for urgent action to address climate change. If there is one thing that Labor can claim to have a clear mandate on, it is addressing climate change, and anything positive they do to address climate change - as long as they go far enough - is going to have a LOT of support from the crossbench - which has never been fuller than it is now!