When the Democrats won both the House and the Senate majority, it shifted the investment strategy substantially.
The party’s win in Texas will likely make it more difficult for AI companies to build their much-needed data centers. In particular, SpaceX (SPCX) and Tesla (TSLA) might face more feasibility reviews. Starting a data center would involve approval from local communities.
ETF Strategies
The Democrats having a majority weakens the odds of the White House getting over $1.5 trillion in defense spending. Aerospace firms like Lockheed Martin (LMT), Northrop Grumman (NOC), and RTX (RTX) might win government contracts that are lower in dollar value. That would hurt their profit growth.
Oil prices fell substantially before and after the midterms. WTI crude prices closed at $87.41/bbl, down from $105/bbl at the start of November. Brent crude prices fell from around $117 in late October to close at $94.06.
Exxon Mobil (XOM) led the energy sector lower. XOM stock fell by 4.62% on Wednesday. ConocoPhillips (COP), Occidental Petroleum (OXY), Devon Energy (DVN), EQT, and Texas Pacific Land (TPL) were among the energy names falling sharply.
Clean energy firms jumped, then slumped intraday. First Solar (FSLR) traded near $220, which is its 200-day simple moving average. FSLR closed at $194.51.
Healthcare plan firms will fare well with the Democrats. UnitedHealth Group (UNH), Elevance (ELV), and CVS Health (CVS) should outperform the market.
