8 Days Later: Trump Effect On Financial Markets
It's been 8 days since the Presidential Election and financial markets have had quite a wild ride. On election night, S&P futures traded down limit of -5%. It appeared that markets would react strongly to the downside much like after the Brexit vote. However, the markets quickly digested the surprising Trump decision and markets have traded sharply higher on hopes that Trump's policies will be inflationary and stimulate the economy. While it is too early to tell what he will be able to accomplish, financial markets have wagered some early bets on who the winners and losers will be. The early winner is financial stocks. Trump is widely expected to roll back the regulations of Dodd-Frank which were enacted after the financial crisis of 2008. Financials are also benefiting from the rise in long term interest rates which benefits their net interest margin and equals larger profits. The sharp move in interest rates caused headaches for high dividend stocks which were the hardest hit with REITs, consumer staples and utilities all in the red.
| PRICE | |||
| TICKER | PER SHR | Price % Chg | |
| SYMBOL | 11/16/16 | Since Election Day | |
| Indices | |||
| ISHARES RUSSELL 2000 | IWM | 129.54 | 9% |
| S&P MIDCAP DEP RECPT | MDY | 290.48 | 5% |
| TOKYO NIKKEI 225 AVG | TNAI | 17862.21 | 4% |
| SPDR DJ INDU AVG | DIA | 188.98 | 3% |
| S&P 500 | SPX | 2176.94 | 2% |
| FRANKFURT DAX INDEX | FSEI | 10663.87 | 2% |
| POWERSHARES QQQ TR 1 | QQQ | 116.91 | 0% |
| ISHARES MSCI EAFE IX | EFA | 56.39 | -2% |
| ISHS MSCI EMRG MKTS | EEM | 34.70 | -7% |
| Sector | |||
| SPDR FIN'L INDEX | XLF | 21.86 | 9% |
| SPDR INDUSTRIAL IDX | XLI | 61.19 | 5% |
| SPDR ENERGY INDEX | XLE | 71.32 | 3% |
| SPDR HEALTH CARE SEL | XLV | 70.17 | 3% |
| SPDR MATERIALS SELCT | XLB | 48.37 | 2% |
| SPDR CONSMR DISC SEL | XLY | 80.48 | 2% |
| SPDR TECHNOLOGY IDX | XLK | 47.10 | -1% |
| REAL EST S SPDR FUND | XLRE | 29.93 | -2% |
| SPDR CONSUMER STAP | XLP | 50.77 | -4% |
| SPDR UTILITIES INDEX | XLU | 46.42 | -6% |
| Fixed Income | |||
| ISHARES 1-3YR TRSRY | SHY | 84.62 | 0% |
| SPDR HIGH YIELD BOND | JNK | 35.72 | -1% |
| ISHARES 3-7YR TRSRY | IEI | 123.55 | -1% |
| ISHARES IBOXX $INVST | LQD | 118.00 | -2% |
| ISHARES 20+YR TRSRY | TLT | 123.01 | -5% |
| Commodities | |||
| US BRENT OIL | BNO | 13.30 | 2% |
| ELEMENTS RGRS AGRLTR | RJA | 6.29 | -1% |
| SPDR GOLD TRUST | GLD | 116.77 | -4% |
| Currency | |||
| U.S. DOLLAR INDEX | TXA | 100.30 | 2% |
| CHINESE YUAN | CY.FX | 14.54 | -1% |
| EURO | ED.FX | 107.08 | -3% |
| JAPANESE YEN | JY.FX | 92.07 | -3% |
| MEXICAN NEW PESO | MP.FX | 4.95 | -10% |
Trump effect on the Dow
In the table below, you can see the winners and losers of the Dow 30. As stated previously, financials are the clear winners with Goldman Sachs and JP Morgan up over 11% each. Caterpillar is up sharply on prospects of $1 trillion infrastructure spend and maybe a Great Wall of USA on the Mexican border. The laggards are multinational companies that are hurt by rising dollar and interest rates. Coca-Cola and Procter & Gamble were down the most over the last week.
| PRICE | |||
| TICKER | PER SHR | Price % Chg | |
| SYMBOL | 11/16/16 | Since Election Day | |
| Dow 30 | |||
| GOLDMAN SACHS GROUP | GS | 206.26 | 13% |
| JPMORGAN CHASE & CO | JPM | 77.40 | 11% |
| CATERPILLAR | CAT | 93.35 | 10% |
| AMERICAN EXPRESS | AXP | 71.68 | 7% |
| PFIZER | PFE | 31.96 | 7% |
| UNITEDHEALTH GROUP | UNH | 151.50 | 6% |
| DISNEY (WALT) | DIS | 99.12 | 5% |
| GENERAL ELECTRIC | GE | 30.74 | 4% |
| MCDONALD'S | MCD | 119.21 | 4% |
| MERCK & CO. | MRK | 62.63 | 4% |
| UNITED TECHNOLOGIES | UTX | 106.96 | 3% |
| TRAVELERS COS (THE) | TRV | 111.35 | 3% |
| BOEING | BA | 146.44 | 3% |
| INT'L BUSINESS MACH | IBM | 159.29 | 3% |
| WAL-MART STORES | WMT | 71.39 | 2% |
| CISCO SYSTEMS | CSCO | 31.57 | 2% |
| CHEVRON | CVX | 108.35 | 1% |
| HOME DEPOT | HD | 125.33 | 1% |
| VERIZON COMM | VZ | 47.93 | 1% |
| 3M COMPANY | MMM | 172.01 | 1% |
| EXXON MOBIL | XOM | 85.75 | 1% |
| INTEL | INTC | 34.84 | 0% |
| DU PONT E I DE NEORS | DD | 68.88 | -1% |
| JOHNSON & JOHNSON | JNJ | 116.36 | -1% |
| NIKE INC 'B' | NKE | 50.68 | -1% |
| APPLE | AAPL | 109.99 | -1% |
| MICROSOFT | MSFT | 59.65 | -1% |
| VISA | V | 80.08 | -3% |
| COCA-COLA | KO | 41.26 | -4% |
| PROCTER & GAMBLE | PG | 83.19 | -5% |
Disclosure: Please remember that past performance may not more
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