Equities have seen tremendous volatility over the past twelve hours with an 800-point drop in the Dow Industrial futures ahead of a potential Trump victory, to a 1,000-point reversal to the tune of a 1 percent gain as of this writing. Markets will remain turbulent, especially on a sector-by-sector basis, as I predicted in my latest Week in Review segment. This morning we have seen huge gains in financials like JPMorgan Chase up 4.6% and healthcare to include Johnson & Johnson and Gilead Sciences, ahead 2.7% and 6.2%, respectively with Hillary Clinton out of the picture. CVS Health is also making a comeback with a 3% advance on the day. Infrastructure shares such as Deere are also moving higher with DE up 1.2%. Defense stocks are rising as we have seen positives in companies like Harris Corp. reaching an all-time-high of over $100 per share and gaining 3% on the day. CSX will benefit from a renewed interest in coal transport and the shares are up sharply by nearly 6%. Gold is higher on uncertainty fears sending shares of Newmont Mining higher by nearly 2%.
On the negative side, Cerner will be less likely to get much benefit if Donald Trump succeeds in reversing the “Affordable” Care Act, and the shares are down over 5%. Large multi-nationals are in retreat on fears of reduced trade with foreign countries and Colgate-Palmolive and Applied Materials are taking a hit by 2% and 1.7% to the downside. Surprisingly 3M Co. is only off by less than 1%. Income-related stocks like the Utilities Select Sector ETF and the Vanguard REIT are lower by 2.5% and 1.5%, respectively as a move to safe-haven plays are not seen as the place to be as well as an imminent rate hike in December.
I see further volatility ahead as the market adjusts to a stunning upset in the presidential election, but am optimistic that a new Trump presidency and a Republican Congress will be able to accomplish economic growth that the Obama administration could not. Stay tuned.