Market winners and losers from Trump election win
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Money moved in predictable waves across global markets today after a tumultuous U.S. presidential election provided a sooner-than-expected result.
Why it matters: Investors, buoyed now by improved certainty in D.C., doubled down on many of their favorite Trump trades — areas and players of the economy they think will benefit from a second term.
State of play: A mercifully swift outcome from Election Day helped push all three major U.S. equity benchmarks to new records.
- The prospect of a looser regulatory environment, which could help deal flow, drove bets into Big Tech and big bank stocks, including Discover Financial, Capital One and Goldman Sachs.
- Hopes that Trump's protectionist policies could benefit more domestically focused companies helped push small-cap names measured by the Russell 2000 to its highest in nearly three years.
The dollar surged to a four-month high as investors expect tariff plans to increase inflation and dampen rate cuts.
- In turn, demand, and thus prices, for dollar-denominated commodities such as gold, copper, oil and U.S. agricultural products fell.
Utilities, consumer staples and real estate stocks were abandoned in favor of the Trump trade.
Zoom in: Energy and solar names, including FirstEnergy Corp and First Solar, tumbled amid fears that the Inflation Reduction Act will be repealed.
- Pepsi, Mondelēz, Hormel and other consumer brands saw a sell-off as investors anticipate higher prices from tariffs.
- Housing and real-estate names fell in response to 30-year fixed mortgage rates moving higher following a rise in 10-year Treasury yields.
- And health care was stuck in limbo amid greater uncertainty around the Affordable Care Act.
Reality check: Trump's promises and threats haven't always materialized.
- Flashback: Back in 2016 he vilified the tech sector and talked about drilling, but tech was the best-performing sector during his first term, while energy was his worst.
What they're saying: "Investors believe they have a handle on what Trump will do this time. But it's not obvious that they are any better at assessing politics, or that Trump himself is any more predictable," WSJ's James Mackintosh writes.
What we're watching: Some specific stocks are faring better than their industry peers.
- Tesla, for example, outpaced competitors Ford and GM as analysts weighed the company's head start against the upcoming elimination of EV tax credits as well as its ties to the new administration, thanks to Elon Musk.
