The election changed everything and nothing for the US stock market

In some ways, the election was the decisive determinant of this week’s winners and losers in the stock market.

At the single-stock level, you can’t help but contrast the surge in private prison operator Geo Group versus the swoon in clean-energy companies like First Solar.

In other ways, however, the market reaction this week has affirmed the status quo. A key theme is the stocks that were doing well before the election are doing well after it. In other words, winners win.

The best-performing US equity factor this week among portfolios compiled by Bloomberg is price momentum, which takes a long position in companies that have done well over the past year — like GE Vernova, AppLovin, Nvidia, and MicroStrategy — while shorting laggards like Boeing, Intel, Tesla, and Nike. And momentum still wins even while weighed down by the 25% jump in Elon Musk’s automaker this week!

Note: these factor portfolios are “market neutral” — i.e., designed to strip out the impact of the movement of the overall stock market by balancing their long and short positions.

The iShares MSCI USA Momentum Factor ETF and Invesco S&P 500 Momentum ETF, both long-only funds that are overweight the likes of Walmart, JPMorgan, Broadcom, Eli Lilly, Costco, and GE Aerospace, are each up nearly 6% this week, handily outperforming the S&P 500.