U.S. equities have bounced back from a harrowing overnight futures session. The major averages went limit down in the wake of GOP President-Elect Donald Trump’s surprise upset over Democratic rival Hillary Clinton.
The lack of a nasty dispute over the results, a concession by Clinton, and a moderate and gracious tone from Trump did much to soothe nerves and help the major averages push into the green today.
As I write this, the Dow Jones Industrial Average is trading with a 230-point gain.
The dust is still settling, but some broad themes are emerging. Folks are realizing Trump’s economic policies — including tax cut and infrastructure spending plans — are tantamount to a big fiscal stimulus push. Higher inflation expectations, economic growth expectations and fears over a larger national debt are pushing up Treasury yields, and thus lowering bond prices. This is forcing some capital out of fixed income and into equities.
But it’s not all good news. Many areas of the market are suffering as traders price in the electoral outcome. Here are three stocks suffering from Trump’s election.
Stocks That Will Tank Under Trump: General Motors (GM)
General Motors Company (NYSE:GM) shares fell to touch their 200-day moving average on Wednesday for the first time since early September. The culprit: fears that Trump’s aggressively nationalist trade policies could force domestic automakers to increase their manufacturing here in the United States under the threat of tariff on production being imported from places like Mexico.
Clearly, this will result in an increase in expenses and pinch profitability at a time when evidence is building demand is waning in the automaker.
GM will next report results on Feb. 2 before the bell. Analysts are looking for earnings of $1.19 per share on revenues of $39 billion.
Stocks That Will Tank Under Trump: Baidu (BIDU)
Chinese stocks such as internet icon Baidu Inc (ADR) (NASDAQ:BIDU) are getting hit on expectations Trump could hit China for its mercantilist trade policies and currency manipulation, threatening to weaken their economy at a time of vulnerability (slowed growth and a big bad debt problem).
BIDU shares are drifting lower, down nearly 16% from their late September high, despite reporting better-than-expected earnings on Oct. 27.
The company will next report results on Feb. 23 after the close. Analysts are looking for earnings of $1.05 per share on revenues of $2.7 billion.
Stocks That Will Tank Under Trump: Alibaba (BABA)
Alibaba Group Holding Ltd (NYSE:BABA) is being hit by the same dynamic hurting BIDU — namely, the threat of a trade war between China and the United States that could affect everything from China’s currency valuation to its bad loan problem.
Shares are down nearly 13% from their late September high. A test of the 200-day average, last touched in June, looks likely for a 10%-plus decline from here.
The company will next report results on Jan. 26 before the bell. Analysts are looking for earnings of $1.15 per share on revenues of $7.4 billion.