Potential investment areas after election day

here are potential investment areas after election day

1. Trump Victory Energizes Stocks in the Oil Patch- Oil refiners may benefit as an EPA policy regarding ethanol could attract scrutiny from Donald Trumphttp://www.barrons.com/articles/trump-victory-energizes-stocks-in-the-oil-patch-1478726170?mod=yahoobarrons&ru=yahoo
2. The largest gainer is CVR Energy (ticker: CVI), which is controlled by Trump supporter Carl Icahn through Icahn’s investment vehicle, Icahn Enterprises (IEP). CVR is up $3.33 to $16.12, a 26% gain, although it’s still down 58% for the year. HollyFrontier (HFC) has gained $4, or 18%, to $26.71 and Valero Energy (VLO) is up $4.16, or 7%, to $62.16.

   Trump has been critical of the EPA and what he has called its regulatory overreach although he doesn’t appear to have addressed the particulars of the ethanol program that hurt refiners.

   Independent refiners have been hard hit by a rule that requires them to obtain Renewable Identification Numbers (RINs) as part of the Renewable Fuel Standard to prove compliance with ethanol blending requirements. Most gasoline sold at service stations now contains 10% ethanol. The refining industry has been pushing hard to get the EPA to relax the rules, including on the Website fixtherfs.org.

3. http://www.barrons.com/articles/how-to-play-the-great-trump-market-rotation-1478724768
4. Sectors that led the recent stock market advance, such as big technology, are now viewed as sources of capital ready to move into other areas that have lagged. And with interest rates anticipated to rise soon, that will keep the pressure on interest-rate-sensitive groups such as utilities and dividend-paying consumer staples.Based on Trump’s campaign rhetoric, the market thinks infrastructure, biotech and pharmaceuticals, banks and investment companies, and basic-materials stocks are going to do well in the coming months.

   With that said, the Health Care Select Sector SPDR exchange-traded fund (ticker: XLV) jumped about 3% Wednesday to spark a huge change in the trend to the upside (see Chart 1). Trump’s views about Obamacare are at the heart of the move, and biotech and pharmaceutical stocks led the way higher. Medical equipment and medical provider stocks didn’t follow suit.

5. Financials, led by banks, brokerages, and life insurers, had a bigger percentage advance Wednesday, but the entire sector was more uniform in its bullishness. Perhaps this is due to the steepening of the yield curve, which allows banks to borrow at low short-term interest rates and lend money at higher long-term rates. Or perhaps it was a view that the Federal Reserve will look and act very differently in a few months’ time under a new administration.
6. American Express (AXP) offers an intriguing chart as it breaks out from a yearlong basing pattern (see Chart 3). The stock started to decline in late 2014 and collapsed last January on news that Fidelity Investments was switching its cash-back credit card from American Express to Visa (V). However, the stock rallied from the depths and is finally breaking through strong resistance.
7. Basic-materials groups such as steel and industrial metals are also looking strong in the election’s wake, with huge gains in such names as steel producer Nucor (NUE) and aluminum producer Alcoa (AA). And industrial stocks such as construction- and mining-machinery maker Caterpillar (CAT) and defense contractor General Dynamics (GD) are also up a great deal.
8. http://blogs.barrons.com/stockstowatchtoday/2016/11/09/trump-victory-big-for-biotech/?mod=BOL_hp_highlight_5
9. And drug wholesalers are enjoying a similar leap, with McKesson (MCK) and Amerisource Bergen (ABC) climbing more than 5% in recent market action.

   Trump and other republicans made high drug prices part of their campaign messages. But the issue never had the priority for them that it did for Clinton, explain Citigroup analyst Robyn Karnauskas. “We will know more when the new president unveils his plans in coming months,” she writes in a recent note.

   Many regard biotech stocks as a bargain. As my colleague Abby Schultz wrote in a Barron’s Next piece published yesterday that recommended biotech stocks as “a rare buying opportunity,” smart investors look beyond political headlines to consider a sector’s fundamentals. In the case of healthcare, those fundamentals are an aging population and rising demand for new drugs.

10.  

    For hospitals and some health insurers, however, Trump’s victory is akin to Armageddon, or at least that’s how investors are reacting.

    “A GOP Triple Play: The worst possible outcome for HC stocks is a reality,” writes Sheryl Skolnick and Ann Hynes, health-care service analysts at Mizuho Securities in a note published this morning warning of “extreme risk” for stocks exposed to a repeal of Obamacare.

    We see extreme risk of ACA repeal/replace, loss of the Medicaid expansion, a primary driver of results for both hospitals and health plans, and reversal of the many value-based regulations that promote home health care. Only the potential for a Senate filibuster protects the ACA. We therefore are downgrading our Buys to Neutral and cutting PTs for our covered companies.

    Shares of Tenet Healthcare (THC) toppled 27% and LifePoint Health (LPNT) fell almost 12%.

    In the insurance industry, Centene (CNC) and Molina Healthcare (MOL), the two largest Medicaid-focused health insurers, each fell 18%.