Well, that was a surprise, wasn't it? Donald Trump's shocking win has put the markets on notice this morning, although those posting to Facebook at 3 a.m. of the market "crashing" (I was awake and read a few of those posts) are sorely disappointed. S&P 500 futures recovered more than half of their 10-11 p.m. losses and overseas markets have, with the exception of the Nikkei, recovered from overnight lows. The FTSE 100 is barely down as I write this, and Tuesday's results are supportive of the beaten-down pound sterling.
That's the point. The rest of the world is moving on from the results and you should be, too. As much as I am going to enjoy the endless navel-gazing from the media, reading all the "what went wrong for Clinton" stories wastes valuable time that you could be using to research your portfolio.
Trump's victory is actually less relevant to the markets than wins by underdogs such as Pennsylvania Senate incumbent Pat Toomey. The American populace delivered a mandate and Toomey was a prime example. He was able to defeat an opponent in Katie McGinty who was incredibly well-funded yet dogged by a scandal involving -- wait for it -- emails. Toomey is a past officer of the Club for Growth, and that organization's focus is exactly what the American voter was seeking from this election: growth.
So, we need to shift our focus away from the animus of the election and look for the same answers to the same questions that bedeviled -- and empowered -- voters across America.
Why is the economy not growing at rates that have prevailed historically? Why is Barack Obama the only postwar president to not deliver a year of 3% -- or even 2.75% -- growth? Why is the ratio of employment to population hovering at 40-year lows and what happened to the nearly 95 million people that Bureau of Labor Statistics data show as not in the workforce?
The quickest, most politically expedient way to stimulate a malaise-ridden economy is through infrastructure projects. Though the Obama stimulus package of 2009 was ineffective and, in fact, the only stimulus package that has been effective in the past 80 years was World War II (if you want to debate the efficacy of the New Deal with me, send me an email at firstname.lastname@example.org), infrastructure spending was a highlighted feature of Trump's victory speech last night.
So what if stimulus doesn't work? Very little that comes out of Washington D.C. actually does. Stimulus looks good, it feels good, and it gets politicians re-elected.
The Republicans now have a mandate to reverse some of the anti-business decisions made by the current administration, most notably to block the Keystone XL pipeline.
Pipeline MLPs are one place to look for "Trump Plays," and classic infrastructure names such as Chicago Bridge & Iron (CBI) (up 5% in trading today) are attractive, as well.
A rebound in construction -- as well as extremely strong Chinese import data, a sign that the oft-predicted "slowdown in China is just not happening -- might finally bring a lift to moribund shares of Caterpillar (CAT) , too.
Finally, crude oil shipping plays will benefit from the newfound U.S. drive toward energy independence (exports are a big part of that) and I would continue to focus on companies such as Euronav (EURN) and Navios Maritime Midstream Partners (NAP) that have heavy exposure to the VLCC (very large crude carriers) segment of the tanker market.
So, be careful with stocks today. Remember, however, to put the boldface names in this column on your watch list for future trades. I believe selectively investing in strategic sectors will allow you to trump the markets going forward.