Hedge funds are piling into bank stocks at the fastest rate in three years while selling renewable energy stocks following the U.S. election, according to data from Goldman Sachs (GS).
Financial stocks such as banks are the hot play for hedge funds after Donald Trump reclaimed the U.S. presidency, says Goldman Sachs, which is itself a Wall Street investment bank.
Banks and other financial stocks are expected to benefit from less regulation under a new Trump administration. Finance companies are seen benefiting from expected tax reforms.
As a group, U.S. bank stocks have risen 11% since Trump's election win became clear in the past week.
Stocks of companies that offer consumer financing, capital markets, and financial services have also been marching higher in recent days after the U.S. election.
On the flip side, stocks of utilities and companies involved in the clean energy transition have been falling since Trump’s election victory.
Independent power and renewable electricity producers were the most sold stocks, with hedge funds now betting against U.S. utilities.
A new Trump administration is expected to increase drilling for crude oil and natural gas, ramp-up fracking and unwind environmental legislation aimed at stemming climate change.
The stock of Goldman Sachs has risen 14% in the last five days and is now up 52% year-to-date and trading at $589.26 U.S. per share.
