The 2024 election is upon us, and investors are closely scrutinizing the potential impact of a second Trump presidency on the stock market. While his first term saw impressive market gains, there were also notable casualties. Looking back at 2017, Trump’s first year in the White House, reveals key insights into which sectors might face challenges if he secures another victory.
2017’s Worst Performers: A Cautionary Tale
The year 2017 witnessed remarkable stock market growth, with the S&P 500 surging by 21.7%. However, while many companies thrived, a significant number struggled. Here are the ten worst-performing stocks in the S&P 500 from 2017, as reported by Marketwatch:
1.
Baker Hughes (BKR):
Down 51% – Energy2.
Range Resources (RRC):
Down 50% – Energy3.
Under Armour (UA, UAA):
Down 50% – Consumer Discretionary4.
Scana Corp:
Down 46% – Utilities5.
Envision Healthcare Corp:
Down 45% – Healthcare6.
General Electric (GE):
Down 45% – Industrials7.
Mattel Inc (MAT):
Down 44% – Consumer Discretionary8.
Chesapeake Energy Corp (EXE):
Down 44% – Energy9.
Advance Auto Parts (AAP):
Down 41% – Consumer Discretionary10.
Signet Jewelers (SIG):
Down 40% – Consumer DiscretionaryLessons Learned: Energy and Beyond
It’s crucial to note that some of these companies have undergone significant changes since 2017. For instance, Baker Hughes has merged with General Electric’s oil and gas division, while Chesapeake Energy has undergone bankruptcy protection and rebranded as Expand Energy. However, the overall trend remains clear: Energy, utilities, healthcare, and consumer discretionary sectors were particularly vulnerable in Trump’s first year.
The presence of these sectors on both the best and worst performer lists in 2017 highlights their volatile nature. While they might see short-term gains, they could face significant downward pressure in the long run. This suggests that if Trump wins in 2024, these sectors may again experience volatility.
Political Winds and Market Trends
Trump’s policies, particularly those focused on increased drilling and a shift in foreign policy, could significantly impact oil prices and the profitability of energy companies. Therefore, energy stocks, which were among the worst performers in 2017, might see a repeat performance in the wake of a Trump victory in 2024.
The 2017 experience also suggests that investors may be quick to take profits after an election year, leading to potential market selloffs in the following year. This cyclical pattern could play out again if Trump is re-elected.
Navigating the Election: A Look Ahead
With the 2024 election approaching, investors are actively positioning their portfolios based on potential outcomes. While the future is uncertain, understanding the historical performance of different sectors and their potential vulnerability to political winds can provide valuable insights.
As we head into the final weeks before the election, consider diversifying your portfolio and focusing on sectors that could benefit regardless of the outcome. For example, defense and cybersecurity sectors are considered relatively safe bets as they are likely to remain in demand regardless of who wins. Remember, informed investment decisions require careful analysis and a balanced perspective on the potential impact of political events.
