The above table from StockCharts.com shows the post-election percentage change in the largest sector ETFs. Here are some thoughts on why certain sectors have rallied or sold off.
- There has been talk of repealing or scaling back Dodd-Frank, which could potentially be a huge boon for the financial industry (NYSEARCA:XLF). In addition, the Fed is now raising interest rates, which increases the interest rate spread, which should increase bank earnings.
- Industrials (NYSEARCA:XLI) and basic materials (NYSEARCA:XLB) are rallying in hopes of a large infrastructure bill.
- Trump has appointed a very pro-oil cabinet: Perry at the Department of Energy and Rex Tillerson as Secretary of State. In addition, OPEC has agreed to limit production. Both these facts explain the Energy Select Sector SPDR ETF's (NYSEARCA:XLE) recent rally.
- There is a great deal of concern underlying healthcare (NYSEARCA:XLV) policy. The pending ACA repeal will put the insurance markets on very tenuous footing. In addition, there is growing concern that Congress will become more aggressive on drug prices (see this story from today's NY Times).
- Rising interest rates are a net negative for utilities (NYSEARCA:XLU).
- The 10 largest consumer staple (NYSEARCA:XLP) stocks are multinational companies. The strong dollar and Trump's anti-trade talk would be a net negative for this sector.