There was the fear that healthcare and the financial space would get hurt disproportionately. And when you look at the actual winner in Donald Trump, he had very different thoughts about both of those sectors.
Within healthcare, Hillary Clinton wanted to impose some kind of drug price controls and Trump wants to roll back the Affordable Care Act. I don’t think that happens, but at the same time it’s not the same pressure on the healthcare sector.
When you look at the financial sector, there are two things at work. One is that there’s an expectation that rates are going to go up, but more importantly, there will be a much lighter regulatory hand on the financial space as compared to the heavier hand that we’ve seen over the past three to four years.
I think two sectors that would benefit under both candidates—and now that the election is behind us, you’re seeing some uplift in both of them—one is multinationals from the perspective that both candidates were talking about repatriation of trapped cash from overseas. I think that probably happens early in 2017. The second is when you look at infrastructure plays, and both candidates talked about significant infrastructure spending plans, and that happens early in 2017. So some of those stocks are also rallying today.
Trade was probably one of the most divisive issues in the election, with Donald Trump talking about building a wall and protectionist-type policies. I think we have to differentiate between campaign rhetoric and actual intention of what the Republican party wants to do. I’m not sure it’s good for anyone to have overly protectionist policies, and I think many of those fears will dissipate over time.
When we see companies in the market or sectors in the market that are being disproportionately hit by fears over trade, I think that represents opportunity post the election.
The views expressed herein do not constitute research, investment advice or trade recommendations and do not necessarily represent the views of all AB portfolio-management teams.