The equities market and stock ETFs rounded out November on a subdued note after a bullish run in response to Donald Trump’s presidential election win.
U.S. markets rallied over November, with the Dow Jones Industrial Average up 5.4%, the Nasdaq Composite 2.6% higher and the S&P 500 up 3.4%.
The best performing non-leveraged exchange traded products for the past month include the er SPDR Metals & Mining ETF (NYSEArca: XME) up 24.1%, iPath Pure Beta Copper ETN (NYSEArca: CUPM) up 23.6% and ETFS Physical Palladium Shares (NYSEArca: PALL) up 23.2%.
Metals, notably industrial and base metals, and the mining sector surged over the past month on Trump’s victory after the President-elect promised to increase fiscal spending to build up America’s aging infrastructure.
On the other hand, the worst non-leveraged ETPs of the past month include the VanEck Vectors Egypt Index ETF (NYSEArca: EGPT) down 29.6%, iPath Global Carbon ETN (NYSEArca: GRN) down 28.3% and Global X Brazil Consumer ETF (NYSEArca: BRAQ) down 17.5%.
The month of November started off on uncertain footing heading into election day as political risk and concerns over the FOMC’s decision on interest rates gripped the markets. While many expected Democratic runner Hillary Clinton to win, the Trump triggered an surge in U.S. stocks on hopes that the Republican winner would increase government spending and reduce corporate taxes to fuel economic growth.
Following Trumps win, money poured into the equities market and exited out of bonds, with yields on benchmark Treasury notes surging to 2.37% at the end of November.
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.
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