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Trump's First Press Conference Puts These ETFs in Focus

Sanghamitra Saha

Donald Trump’s first press conference since July had a mixed impact on the broader market. Many investors were disappointed about the lack of clarity on the proposed $1 trillion infrastructure spending and corporate tax reforms. Rather, he attacked big pharmaceutical companies on the price gouging issue, admitted to Russia’s involvement in U.S. election hacking and conflicts of interest in his business plan.

Overall, the market added moderate gains with SPDR S&P 500 ETF SPY tacking on about 0.3% returns, SPDR Dow Jones Industrial Average ETF DIA returning 0.5% andPowerShares QQQ ETF QQQ advancing 0.3% on January 11, 2017.

Let’s delve into the details and find out meaningful ETF winners and losers out of this meeting.

Losers

iShares US Aerospace & Defense ETF ITA

Donald Trump reproached the cost of Lockheed Martin’s (LMT) F-35 program during his news conference on Wednesday. Asa result, LMT shares lost about 0.4% on January 11, 2017. Defense ETF ITA and PowerShares Aerospace & Defense ETF PPA lost about 0.1% each on January 11, 2017.

SPDR S&P Pharmaceuticals ETF XPH

Healthcare companies were especially crushed following the meeting as Trump said, “they’re getting away with murder.” “Pharma has a lot of lobbyists and a lot of power and there is very little bidding. We’re the largest buyer of drugs in the world and yet we don’t bid properly and we’re going to save billions of dollars (read: Biotech & Pharma ETFs to Suffer in 2017 Too?).”

In December, Trump announced that he will cut down prescription drug prices. As per CNBC, Trump is in favor of reduced regulations and “prescription drugs are possibly the most regulated products in America.” Trump also commented that “renegotiating Medicare prices would save $300 billion a year as the government is the biggest purchaser of prescription drugs.”

Thanks to these comments and uncertainties, most of the biotech and pharma ETFs were hammered following Trump’s meeting. XPH lost about 3%, SPDR S&P Biotech ETF XBI shed over 3.4% while ALPS Medical Breakthroughs ETF SBIO dropped about 3.8% on January 11, 2017 (see all healthcare ETFs here).

iShares MSCI Mexico CappedEWW

The Mexican peso and stocks were once again hit by Trump as peso fell to a historic low. Donald Trump’s warning to impose a “border tax” on U.S. manufacturers that get products made abroad and sell in the U.S. will likely hit the U.S. auto companies. Several auto companies have manufacturing hubs in Mexico. Plus, his plans of building a wall along the border as part of his immigration strategy and making an unwilling Mexico pay for it caused EWW to shed about 0.3% on January 11, 2017 (read: Foreign ETFs to Win or Lose on Trump Victory).

PowerShares DB US Dollar Bullish ETF UUP

Lack of detailing about fiscal reflation lowered the greenback’s strength. Analysts have now started questioning the certainty of the Trump’s plans which undermined the dollar’s raging rally. U.S. dollar ETF UUP lost over 0.2% on January 11, 2017.

Winners

SPDR Gold Shares GLD

As soon as market uncertainty started rearing its head and the dollar fell, gold prices advanced. Gold bullion ETF GLD added over 0.3% on January 11, 2017.

iShares 20+ Year Treasury Bond TLT

The U.S. 10-Year Treasury yield dropped to 2.38% on January 11, 2017 from 2.45% seen at the start of the year on growing uncertainty over the Trump-bump ahead. Nomura Securities indicated that “the administration has not come up with an effective policy mix, or has not made any progress in negotiations with influential members of Congress rather than that he is keeping them in his back pocket.” All these once again started to boost the appeal for TLT. The fund was up over 0.3% on January 11, 2017 (read: 6 Best Bond ETFs of 2016 -- High Yield Tops).

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ISHARS-20+YTB (TLT): ETF Research Reports
 
SPDR-DJ IND AVG (DIA): ETF Research Reports
 
SPDR-GOLD TRUST (GLD): ETF Research Reports
 
SPDR-SP 500 TR (SPY): ETF Research Reports
 
NASDAQ-100 SHRS (QQQ): ETF Research Reports
 
PWRSH-DB US$ BU (UUP): ETF Research Reports
 
ISHARS-US AEROS (ITA): ETF Research Reports
 
ISHARS-MEXICO (EWW): ETF Research Reports
 
SPDR-SP PHARMA (XPH): ETF Research Reports
 
SPDR-SP BIOTECH (XBI): ETF Research Reports
 
ALPS-MED BRKTH (SBIO): ETF Research Reports
 
PWRSH-AERO&DEF (PPA): ETF Research Reports
 
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