It was red, white, blue, and green all over the stock market today (except for energy), as investors greeted Election Day with open accounts. Monday’s rally carried over as the DJIA jumped 2%, while the S&P 500 and the Nasdaq climbed 1.78% and 1.85%, respectively. It was the second-best election day in history, second only to 1984.
Industrial and financial stocks led the gains, but the rally was cross-sector with strong breadth as investors have shifted back into risk this week. It’s impossible to read election tea leaves from the rally, so we won’t even try. Safe to say that investors want this election to be over, and for a clean result. No telling when that will be.
We’ve broken down some sector and stock returns since Election Day 2016 below. They tell us as much, if not more, about the era we are living through as the people we elect to lead us through it. We should make our political decisions on much more personal and important terms.
The good news about this election is that people seem to be doing that.
Presidents take a lot of the credit and very little of the blame for the performance of stock markets. They always have. But the era defines the returns more than the person sitting in the Oval Office, and President Trump’s era has been defined by the crumbling of the energy complex and the explosion of the digital economy, which created trillion-dollar valuations for several of its biggest companies.
Top Sector Losers Among the S&P Index Industry Groups Since the 2016 Presidential Election
Out of the 505 stocks in the S&P 500 (Yes … there are 505), very few people predicted that Etsy (ETSY), the little arts and crafts sharing and commerce site, would be the top performing stock since Trump was elected in 2016. It bested the best of the semiconductor stocks, which have effectively become the transport stocks of the 21st century.
The top 10 winners are the digital economy at work, except for MSCI, which is on a mysterious run.
The bottom 10 stocks are exhibits 1-10 of how our economy has transformed and the body blow that the energy sector has been hit with due to the pandemic.