The S&P 500 has fallen 3.5 percent in the two days since President Obama’s re-election. Maybe this means investors are scared of the administration; more likely they're spooked by continuing fiscal headaches in Europe and that the split government re-elected Tuesday might fall off a “fiscal cliff” of automatic spending cuts and tax hikes.
Either way, the stock market is not, generally speaking, happy. But there are exceptions. Some sectors are popping champagne corks the president was re-elected. We’re not saying you should pile all your cash into any of them; the re-election bump in price has already been factored into them, at least in part. But it’s nice to know that, amid all the Wall Street doom and gloom of the past couple of days, there are some companies partying like the 2013 inaugural is already here.
Gun Makers
__ Smith & Wesson Holding Corporation (SWHC)__ is up 12 percent since election night while Sturm, Ruger & Co. (RGR) is up 11 percent. Why? Well, one line of thinking is that gun nuts, uhhh Second Amendment fans, expect the president to try and tighten gun control measures, so they're ready to pull the trigger on purchases. An alternate theory is that all the debate talk about firearms got people thinking about firearms, leading them to go out and buy firearms. “Recent 'political' sales have increased the profile of firearm use,” said a Benchmark analyst quoted by the Wall Street Journal. (See? The First and Second Amendments have more in common than you thought.)
Hospitals
HCA Holdings Inc.(HCA) shares are up 4 percent and Health Management Associates Inc. (HMA) stock is up 5 percent since Tuesday. The president’s re-election means the preservation of the Patient Protection and Affordable Care Act – “Obamacare,” if you prefer – and along with it the goal of extending health care to 30 million Americans. Among publicly traded entities, hospitals are expected to be the chief beneficiary.
Medicaid-Focused Health Insurers
Centene Corp. (CNC) is up 6 percent since the election thanks to its focus on insuring Medicaid patients; many of the the tens of millions of Americans added to insurance rolls under health care reform will be covered through Medicaid. Broad-based insurers, however, are facing tougher regulation, and Medicare-focused providers will see their federal reimbursements tightened.
Don't Bet on These Guys
Not every stock got the Obama bump pundits predicted: Alternate energy provider First Solar (FSLR) has seen its shares fall 3 percent, the__ PowerShares Cleantech fund (PZD)__ is down 3 percent, and generics-focused pharmaceutical company Teva (TEVA) is down 1 percent. That just goes to show that when you combine the uncertainty of politics with the uncertainty of financial markets, there's nothing even approaching a sure bet.
