Trump Elected; Steels, Autos, Banks Biggest Winners

It’s exciting to see significant market moves like the ones we witnessed yesterday, as they provide valuable insights. Let me explain. As a synthesizer of large data sets, SIA thrives on days with substantial market shifts—moments when SIA practitioners take a screenshot to refer back to later. Much like a card player who accidentally reveals their hand, markets sometimes expose key insights on pivotal days, like yesterday. Could this indicate what the next phase of investing might bring in terms of asset classes and sectors?

Of course, the sheer volume of data can be overwhelming, and without a powerful AI platform like SIA, this analysis would be nearly impossible. If you asked 50 advisors what the big move was yesterday, many experienced market operators would point to the banks. However, two sectors that saw the biggest moves were steelmakers and the auto industry. This mirrors the unusual movements we observed earlier in the summer when names like General Motors and Algoma Steel, as well as many small-cap industrial stocks, showed strong momentum.

Looking back, it seems the markets had already priced in a Trump victory—though it was difficult to see the forest from the trees at the time. Now that a Trump White House is now certain, it’s time to reflect on the findings leading up to the election and dive deeper into areas that require more analysis to uncover additional opportunities. One of the major elephants in the room is the impact of Obamacare and the challenges it presents for healthcare and insurance companies, but we’ll leave that discussion for another day, after the SIA platform has had a chance to analyze these sectors in the coming weeks and months. The other big mandate from the Trump administration is the “America First” approach, especially when it comes to the production of goods that are Made in America. At the heart of this is steel, and the struggles of steelmakers are central to the new administration's agenda.

Earlier this summer, on July 23rd, the SIA AI detected a shift in the behavior of Algoma Steel Group Inc. (ASTL.TO), which we attributed to movements in Ford Motor Company and General Motors—both of which were making their own moves. SIA also observed that money was beginning to flow into small-cap companies, particularly small-cap industrials. Looking back now, these early signals may have been indicators of a Trump victory. Now that Trump is, in fact, President of the United States, what does this mean for the steel industry? In today’s Equity Leaders Weekly, we’ve built a custom steel manufacturing matrix to analyze, from a technical perspective, the best names this sector has to offer investors.