6 Stocks & ETFs To Avoid On Trump's Win
Zacks Investment Research | Nov 10, 2016 12:38AM ET
Now that the U.S. citizens have elected Republican Donald Trump as their president, the whole world is busy speculating and analyzing the impact of his economic plans on several asset classes. The initial shock resulted in a crash in market futures, though investors nerves soothed in the key trading session following Trump's conciliatory acceptance speech.
In fact, several corners of the ETF world saw bountiful gains and hit 52-week highs. But some corners of the investing world are likely to be hit hard. Below we highlight 5 ETFs and stocks that are in a high-risk zone now.
Technology
Trump is expected to take stricter steps on immigration and outsourcing – the both pillars that the tech sector stands on. Several technology companies like Apple (NASDAQ:AAPL) outsource their manufacturing activities to low-cost countries like China and Taiwan. Speculation is rife that Tech ETFs to Watch Post Apple's Mixed Bag Q4 ).
Auto
The same logic is applicable for the automotive sector too. Companies like Ford Motors (NYSE:F) and General Motors (NYSE:GM) get their Auto ETFs to Watch on Dismal September Sales ).
Mexico
Trump’s win has by now become synonymous with Mexico’s loss. Mexico is a Trump-unfriendly investment due to his plans of building a wall along the border as part of his immigration strategy and making Mexico pay for it (read: 10 ETFs to Watch Today and After The Election ).
Mexico peso slumped over EWW was down over 8.5% on November 9. Several Mexican stocks like Grupo Aeroportuario del Sureste, SAB de CV (NYSE:ASR) and CEMEX, S.A.B. de C.V. (NYSE:CX) are now in danger. ASR and CX were down 6.8% and 7.1% respectively on November 9.
Emerging Market
Yet again, the overall emerging market bloc may fall prey to Trump’s international policies and trade plans. Already Trump has raised questions over the longevity of trade agreements with Mexico and Canada and has opposed the pan-Pacific trade deal. And since several emerging markets including China are low cost producers and known for outsourcing, migration of services and production back to America may weigh on emerging market growth.
Emerging market ETFs like iShares MSCI Emerging Markets AIA (down about 2.8%) or stocks like Kandi Technologies Group Inc. (NASDAQ:KNDI) (down 12.4%), ZTO EXPRESS (CAYMAN) INC. (NASDAQ:Z) (down about 7.3%) and AU Optronics Corp. (NYSE:AUO) (down over 6.1%)maythus feel the pinch.
Alternative Energy
With Trump pledging to boost fossil fuel, alternative energy ETFs like PowerShares WilderHill Clean Energy Portfolio ETF 4 Frightful ETFs of This Year ).
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Solar stocks like Vivint Solar, Inc. (NYSE:VSLR) (down 6.3% on November 9), Yingli Green Energy Holding Co. Ltd. (NYSE:YGE) (down 5.3%) and JinkoSolar Holding Co. Ltd. (NYSE:JKS) (down over 8.4%) are at knifepoint now.
Hospital
As Trump has already vowed to repeal ‘Obamacare’ and launch ‘Trumpcare ‘, beneficiaries of the Affordable Care Act like Hospital stocks may be under the gun. Hospital stock HCA Holdings, Inc. (NYSE:HCA) plunged about 10.8% on November 9.On the ETF front,healthcare providers fund iShares US Healthcare Providers (NYSE:F) ormedical devices fundiShares US Medical Devices IHI lost about 1.5% and over 1.1%, respectively on November 9.
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