As the 2024 presidential election approaches, investors are scrutinizing potential market outcomes depending on who takes the White House. Former President Donald Trump, who previously served four years in the Oval Office, presents a compelling case study for understanding potential market movements under a second term. Examining the top-performing stocks during Trump’s initial year in office, 2017, can offer valuable insights for investors seeking to position their portfolios strategically.
In 2017, the stock market experienced robust gains, marking one of the most successful first years for a president. The S&P 500, a benchmark index for US equities, surged by an impressive 21.7%, a significant outperformance compared to the 12% increase in 2016, which was a presidential election year. With Trump’s potential return to power in 2024, analyzing the top-performing stocks from his first year provides a glimpse into sectors that could benefit.
The top 10 performing stocks in the S&P 500 in 2017 included:
*
NRG Energy (NRG):
+132% (Utilities)*
Align Technology (ALGN):
+131% (Health Care)*
Vertex Pharmaceuticals (VRTX):
+103% (Health Care)*
Wynn Resorts (WYNN):
+95% (Consumer Discretionary)*
Boeing Co (BA):
+89% (Industrials)*
Micron Technology (MU):
+88% (Technology)*
D.R. Horton (DHI):
+87% (Consumer Discretionary, Homebuilders)*
PayPal Holdings (PYPL):
+87% (Technology)*
NVIDIA Corporation (NVDA):
+81% (Technology)*
Pulte Group (PHM):
+81% (Consumer Discretionary, Homebuilders)While these stocks likely benefited from a multitude of factors beyond Trump’s presidency, several common themes and potential connections to his policies emerge. The results highlight the strong performance of health care, consumer discretionary, and technology sectors. Notably, Micron and Nvidia’s inclusion in the top 10 suggests a potential positive outlook for the semiconductor sector under a Trump administration.
Another noteworthy trend is the presence of two homebuilders among the top performers. This sector has gained popularity under the potential presidency of Kamala Harris, who, along with Trump, promotes policies aimed at increasing housing affordability for the middle class. This suggests a potential for a continued focus on housing initiatives regardless of the election outcome.
While historical performance doesn’t guarantee future success, market trends often reveal patterns and indicators for potential future outcomes. Based on the top-performing stocks in 2017, investors may consider allocating a portion of their portfolios to health care, utilities, semiconductors, and homebuilders if Trump secures victory in 2024.
With the election drawing near, investors are actively positioning their portfolios based on potential outcomes. Given the close race anticipated, investors may find it prudent to explore sectors that could benefit under either candidate.
Jay Woods, Chief Global Strategist at Freedom Capital Markets, has identified defense and cybersecurity stocks as key sectors to watch regardless of the election results. He attributes the potential for continued growth in the defense sector to ongoing geopolitical concerns and global instability. This insight underscores the importance of considering factors beyond political affiliations when making investment decisions.
Ultimately, understanding past market trends and analyzing potential future scenarios is crucial for navigating the complexities of the investment landscape. While the 2024 election holds the potential to shape market dynamics, it’s essential to consider a diverse range of factors and conduct thorough research before making any investment decisions.
