It has only been 10 days since the presidential election, but the equity markets have moved markedly on a change in outlook. A Trump victory and a Republican sweep in congress has created some winners and losers–at least in the short-run. With big moves in markets ahead of any concrete policy actions, this could be a case of the stock market jumping the gun.
Below is a graphic that shows the performance of the 11 S&P 500 sectors since the presidential election. The big winners are financials, followed by industrials, discretionary stocks and healthcare shares. The losers: utilities, real estate, staples, and technology. The performance of the 11 sectors since the election tells us that investors are anticipating a lighter regulatory burden, especially on the banks, corporate tax-reform, stronger economic growth, and a smaller probability of price controls in the healthcare sector.
Jeremy Jones, CFA
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