Market analysts said in a report this week that the overall stock market reaction was muted when Donald Trump became U.S. president in 2016. However, they noted that there were notable changes in particular industry sectors.
The investment firm reported that the financial sector, including banks and insurance companies, experienced significant increases in value. Sallie Mae’s stock rose 37% and Freddie Mac’s stock rose 97% over seven trading sessions.
Market experts indicated that the value of bonds and bond-like investments, such as utilities and real estate investment trusts (REITs), fell because investors expected an increase in government spending and a reduction in the tax rate. corporate tax.
The healthcare sector, especially pharmaceutical and biotechnology companies, has seen an upward trend in stock prices. Experts pointed out that the biotechnology exchange-traded fund (ETF) rose by more than 10% the day after the election, while the stock price of Pfizer (NYSE:) rose 7.1%.
In contrast, hospital operators such as HCA, LifePoint Health and Centene, closely tied to the Affordable Care Act (often referred to as Obamacare), have seen their stock prices decline by more than 10% due to concerns over the possible repeal of the ACA .
Stocks in the conventional energy sector, with coal company Peabody leading the way with a 50% increase, rose, while stocks in the renewable energy sector lost value. Defense stocks also rose.
Market analysts noted that concerns about trade policy led to a decline in the value of the Mexican peso and a decline in the stock price of Kansas City Southern (NYSE:), a railroad company with major trade ties to Mexico. By contrast, US Steel, which is expected to benefit from the proposed tariffs, saw its stock rise 17%.
Analysts pointed out that small-cap stocks, including those of private prisons and for-profit educational institutions, were among those seeing the most notable fluctuations. In particular, firearms manufacturers, which were expected to underperform if Hillary Clinton won, saw their stock prices decline by around 15% as the perceived risk of tougher gun control laws has become less likely, which could lead to a reduction in firearm sales.
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