I woke up to news that Democrats had won control of both the House and the Senate. It didn’t take long for the predictions about what happens next to start filling my phone.
My first question was the obvious one: what does this mean for the markets and my portfolio? For now, my plan hasn’t changed. I’m watching the same companies and price levels, and I still have the same cash set aside.
The indexes looked calm. The market wasn’t.
Tuesday’s trading finished before the election results were called. The S&P 500 rose 0.36%, the Nasdaq gained 0.83%, and the Dow fell 0.38%. Overnight, news outlets projected that Democrats had taken both chambers. By Wednesday morning, U.S. futures were a little higher.
But the green numbers didn’t tell the whole story. Most stocks in the S&P 500 fell on Tuesday. A few big technology companies did well enough to pull the index higher. Tech led the sectors, while gold fell. So this wasn’t a simple shift out of technology and into safer investments.
Palantir: great growth, but the shares still fell
Palantir reported third-quarter revenue of $2.31 billion, up 96% from a year earlier. That’s exceptional growth. Its future contracted revenue was about $4.88 billion, nearly unchanged from the previous quarter’s $4.90 billion—but almost twice the $2.60 billion it reported a year ago. The shorter-term part of that contracted revenue rose slightly.
The stock fell about 1.6% on Tuesday. That doesn’t mean the business suddenly weakened. My read is that investors wanted more, especially from a stock whose price already assumes years of strong growth. A great quarter and a falling share price can happen at the same time.
The names on my screen
Novo Nordisk was higher before the market opened after reporting results and raising its full-year outlook. I’ll watch how the shares trade through the day before drawing any conclusions.
Amgen reported yesterday. Revenue rose 8% to $10.4 billion.
Kratos is due to report tomorrow, after the market closes. I’ll watch the results and how the share price responds, then check that against my levels.
I’m not changing my plan for one headline
Election results matter, and policy changes can affect companies over time. But I don’t need to guess what Congress will do next week or trade on the first wave of headlines.
I have cash, and I have levels marked. Now I’m watching how the shares close as they reach those levels. If the price action fits my plan, I can act. If it doesn’t, I can wait.
Have a relaxed Wednesday, and let’s see what tomorrow brings.
The Slow Capitalist is for informational and educational purposes only. It does not constitute financial, investment, legal or tax advice. The views are my own. Investing involves risk, including the possible loss of your principal. Consider your own circumstances and risk tolerance, and speak with a qualified professional before making investment decisions. I may hold positions in the securities discussed.