Among the stock market winners in the Trump trade, smaller companies rallied and outperformed the mid- and large-cap asset categories after President-elect Donald Trump hinted at an increased administrative focus on the domestic economy. The recent strength in the U.S. dollar also lowered the outlook on U.S. exports and revenue for large-cap companies with a bigger international footprint.
The financial sector also enjoyed increased interest, notably bank stocks, as traders bet that Trump could roll back some of the harsher restrictions placed on banks due to Dodd-Frank. Moreover, the recent rise in yields bolstered the revenue outlook on the banking segment.
The industrial sector strengthened as investors anticipated Trump would have a positive impact on defense spending and would increase fiscal spending toward repairing and expanding domestic infrastructure.
Additionally, the healthcare sector, especially the biotech and pharma space, have been under pressure for most of the year as investors anticipated a win for Hillary Clinton whom censured high drug prices, but the area enjoyed a swift rebound with the likelihood of regulations pushed to the side.
For more information on ETFs, visit our ETF Performance Reports category.