Morgan Stanley (MS  ) has put together a cheat sheet for trading different election outcomes, based on evaluating factors affecting certain stocks that are most associated with Republican and Democrat policies respectively.

The firm has split up potential stock outcomes based on different political scenarios.

The first scenario is if the Democrats win the White House, but there is a split Congress. In this case, MS recommends buying emerging market and alternative energy stocks, and selling US energy, big banks, tech and drugmakers. This is driven by the idea that one of the democratic candidates Elizabeth Warren, has outlined an ambitious climate change plan over the years. It involves spending $3 trillion as part of a 10-year plan to move the U.S. to 100% clean energy and protect poorer communities at the mercy of the production of fossil fuels.

The second scenario involves President Donald Trump getting reelected, but Congress remaining divided. Under this, one should buy energy, big banks and telecom companies and sell the US dollar. This is a less radical scenario, and is based more on what we see happening now. For instance, Trump already signed a bill in 2018 that eased regulations on smaller banks and implemented a $250 billion threshold on entities considered too important to fail.

The third instance is called the "Blue Wave" and involves a full democratic sweep of the congress and house. In this case, one should sell big pharma, treasuries, banks, tech and energy, because Democrats have consistently criticized large drug companies and banks for ethical misconduct and having too much market power. One should thus buy the US dollar, transportation and alternative energy stocks.

"While it would be reasonable to deduce from our survey that moves toward a Democratic victory could initially weigh on risk markets, we wouldn't have confidence in the durability of such a reaction. The 2016 election serves as a cautionary tale here," wrote Michael Zezas, head of policy strategy at Morgan Stanley and lead analyst on the 130-page report.

The final scenario involves a full republican sweep, which would be good for U.S. oil and gas, financial firms and telecommunication companies because of increased deregulation. However, this would hurt emerging markets stocks and alternative energy.

"It is a very reasonable statement that if Warren were elected, and these policies were enacted, it would be negative for the stock market in the extreme, because share prices are an expectation of future earnings," Tom Essaye, founder of Sevens Report Research, wrote. "These policies would hurt corporate earnings universally, although they would likely improve quality of life for many demographics at the expense of corporate profits," he added. "Whether that trade off is positive, or negative, I'll leave you to decide."