Financial analysts said in a report released this week that when Donald Trump became the president of the United States in the 2016 election, the overall market reaction was muted, but there were notable changes within specific industries.
The investment firm reported that the financial sector, including banks and insurance companies, saw considerable increases in value. Educational loan company Sallie Mae saw its value increase 37%, and home loan company Freddie Mac’s value increased 97% in the seven days after the shares traded.
Debt securities and debt-like investments, such as utility companies and real estate investment trusts, lost value as investors expected a spending plan from the government to stimulate economic growth and tax cuts for businesses.
The healthcare sector, particularly pharmaceutical and biotechnology companies, has seen their stock prices rise. Experts pointed out that the value of the biotechnology exchange-traded fund increased by more than 10% the day after the election, and that the value of the pharmaceutical company’s shares Pfizer (NYSE:) rose 7.1%.
In contrast, hospital operators such as HCA, LifePoint Health and Centene, which were heavily affected by the Affordable Care Act, known as Obamacare, saw their stock values decline by more than 10% due to concerns over the possible repeal of the ACA.
Companies in the traditional energy sector, including coal mining company Peabody, which saw its stock value increase by 50%, saw a rise, while companies focused on renewable energy saw the value of their shares decrease. Defense companies have also seen their stock market value increase.
Financial experts say concerns over international trade have driven down the value of Mexico’s currency, the peso, and the value of shares of Kansas City Southern, a rail transportation company that depends on trade with Mexico. In contrast, steel manufacturing company US Steel, which stands to benefit from the proposed tariffs, saw its stock value rise 17%.
Analysts noted that small companies, including those that run for-profit prisons and educational institutions, were among those whose stock values changed the most. In particular, gun manufacturers, who were expected to be negatively impacted by Hillary Clinton’s victory, saw their stock values decline by about 15% as the risk tougher gun control laws became less likely, leading to an anticipated decline in gun sales.
This article was created and translated with the help of artificial intelligence technology and has been reviewed by an editor. For further details, please see our terms and conditions.
