😎 Summer Sale Exclusive - Up to 50% off AI-powered stock picks by InvestingProCLAIM SALE

How the market reacted when Trump won in 2016

Published 2024-06-15, 03:32 a/m
© Reuters.

Analysts explained in a note this week that when Donald Trump won the 2016 U.S. presidential election, the overall market response was muted, but significant sector-specific moves occurred.

The investment firm said financials, especially banks and insurance companies, led the way with substantial gains. Sallie Mae rose 37%, and Freddie Mac surged 97% within seven trading days.

According to analysts, bonds and bond proxies, such as utilities and REITs, sold off as investors anticipated an expansionary fiscal package and lower corporate tax rates.

The healthcare sector, particularly pharma and biotech, experienced a rally. Analysts noted that the biotech ETF rose over 10% the day after the election, with Pfizer (NYSE:PFE) seeing a 7.1% increase.

Conversely, hospitals like HCA (NYSE:HCA), LifePoint Health, and Centene (NYSE:CNC), which were heavily tied to Obamacare, declined by double digits due to concerns about a potential repeal of the ACA.

Traditional energy stocks, led by coal producer Peabody, which jumped 50%, rallied while alternative energy stocks sold off. Defense stocks also rose.

According to analysts, trade-related issues caused the Mexican peso and Kansas City Southern (NYSE:KSU), a railroad company reliant on trade with Mexico, to drop. U.S. Steel, benefiting from anticipated tariffs, climbed 17%.

Analysts observed that small-cap stocks, including for-profit prisons and colleges, saw some of the largest moves. Interestingly, gun makers, which were shorts in the Clinton portfolio, fell about 15% as the threat of gun control diminished, leading to an expected drop in gun sales.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.