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ETF News And Commentary

Wall Street welcomed the surprise victory of Republican Donald Trump and the outcome was not bad as expected. This is especially true as the major indices logged in more than 1% gains following the results, reflecting a dramatic reversal from the knee-jerk panic seen in global markets overnight when Trump showed a stunning advance in votes.

In particular, the Dow Jones Industrial Average soared 257 points to near-record highs after tumbling as much as 900 points in late-night futures trading. The S&P 500, which hit safety breakers overnight, erased its steep decline and is now within less than 2% of their all-time highs (read: Trump Triumphs: Stocks & ETFs to Rock or Shock).

Given this, several stocks and ETFs saw a huge spike on the day while a few were laggards. Below, we have highlighted some of them:

Hit Zones

Healthcare

The healthcare sector, especially biotechnology and pharmaceutical emerged as the clear winners as Trump moving to White House has erased concerns over the limit to drug pricing, which was the highlight of Hillary Clinton’s campaign. In particular, ALPS Medical Breakthroughs ETF SBIO stole the show climbing 11.1% from the ETF world and Eleven Bio (EBIO - Free Report) surging over 32% from the stock world (read: Healthcare ETFs in the Spotlight as Election Approaches).

SBIO targets companies with one or more drugs in Phase II or Phase III FDA clinical trials by tracking the Poliwogg Medical Breakthroughs Index. It is a small cap centric fund, having amassed $107.2 million in its asset base. On the other hand, EBIO is also a small cap stock with market capitalization of $33.48 million. It is engaged in the discovery and development of protein therapeutics to treat eye diseases primarily in the United States. Both the ETF and the stock have a Zacks Rank #3 (Hold).

Metals & Mining

Metals & mining stocks benefited as Trump promised to revive U.S. manufacturing and rehabilitate the country’s aging infrastructure. He had mentioned rebuilding highways, bridges, hospital and other U.S. infrastructure during his election win speech. While all the ETFs in the mining space have enjoyed smooth trading, SPDR S&P Metals & Mining ETF XME is the winner having gained 7.7%. The ETF offers a broad exposure to the U.S. metal and mining industry by tracking the S&P Metals & Mining Select Industry Index. It has accumulated $761.1 million in its asset base.

Notably, steel makers were the largest gainers in the stock world as Trump had plenty of rhetoric in his campaign to boost the steel industry. Commercial Metals Company (CMC - Free Report) , which manufactures, recycles, and markets steel and metal products, and related materials and services in the United States and internationally, soared more than 20% on the day. The stock has a market cap of $1.96 billion and a Zacks Rank #3 (read: 10 ETFs to Watch Today and After The Election).

Financials

Financial stocks skyrocketed on Trump’s proposed tamer regulatory environment. The banking ETF SPDR S&P Regional Banking ETF (KRE - Free Report) climbed 5.6% – the most on the day. This is one of largest and the most popular ETFs in the banking space with AUM of $2.2 billion and tracks the S&P Regional Banks Select Industry Index. The fund has a Zacks Rank #3.

In the stock world, though big banks like J.P. Morgan (JPM - Free Report) surged to a record high and Bank of America (BAC - Free Report) rallied to a 15-month high, SLM Corporation (SLM - Free Report) having a market cap of  $3.04 billion surged 18.2%. It is one of nation's largest private sources of funding and servicing support for higher education loans for students and their parents. The stock has a Zacks Rank #3.

Defense

Defense stocks surged on hopes of increased military spending under Trump presidency with most of them hitting all-time highs. Huntington Ingalls Industries (HII - Free Report) led the way with an increase of 11.4%. With a market cap of $7.04 billion, the company is engaged in designing, building, overhauling, and repairing ships primarily for the U.S. Navy and the U.S. Coast Guard. The stock has a Zacks Rank #3 (read: 3 ETFs to Buy on Encouraging Aerospace & Defense Earnings).

SPDR S&P Aerospace & Defense ETF (XAR - Free Report) , which follows the S&P Aerospace & Defense Select Industry Index, rose about 5% following the election result. It has AUM of $224.5 million and has a Zacks Rank #2 (Buy).

Flop Zones

Mexico

Mexican peso and the stocks were the hardest hit from a Trump presidency that sent the currency slumping as much as 13.4% to a record low against the dollar. This is because Trump threatened to renegotiate or terminate the North American Free Trade Agreement that would hamper the trade relationship between Mexico and the U.S., and hurt the country’s exports. In addition, Trump seeks to build a wall along the U.S. southern border to keep Mexican immigrants away. This would directly restrain Mexico’s balance of payments.

As a result, iShares MSCI Mexico Capped ETF (EWW - Free Report) , which offers diversified exposure to the Mexican stocks, shed 8.5% on the day. The fund has amassed $1.3 billion in its asset base and has a Zacks Rank #3. From the stock side, Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. (OMAB - Free Report) dropped the most by 11.2%. The company, through its subsidiaries, develops, operates, and maintains airports in Mexico. The stock has a market cap of $1.99 billion and a Zacks Rank #2 (read: Mexico ETFs to Hinge on U.S. Presidential Election).

Solar

The Trump victory has sent the alternative energy space into a tailspin as he promised to revive the downtrodden coal industry and scrap regulations if elected that would be negative for the solar and wind stocks. That being said, Guggenheim Solar ETF (TAN - Free Report) , which offers exposure to the global solar industry, tumbled 5.6%. It has amassed $207.4 million in its asset base and has a Zacks Rank #4 (Sell).

Sunpower Corporation (SPWR - Free Report) is the biggest loser, shedding 14.2%. Having a market cap of $1.01 billion, Sunpower designs, manufactures, and delivers solar systems to residential, commercial, and power plant customers worldwide. It has a Zacks Rank #3.

Treasuries: A Laggard

Last but not the least, Treasuries suffered with PIMCO 25+ Year Zero Coupon U.S. Treasury Index ETF ZROZ shedding 6.6% on the day. This is especially true as the yields on 10-year notes climbed above 2%, the biggest one-day increase since July 2013 given that Trump’s plan of tax cuts, higher issuance of public debt and more government spending will lead to inflationary pressures (read: Should You Buy or Sell Treasury ETFs Now?).

The ETF tracks the BofA Merrill Lynch Long Treasury Principal STRIPS Index with effective maturity and effective duration of 27.35 years. It has AUM of $163.6 million and has a Zacks Rank #2.

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