It's a tale of two sectors for the Trump economy, with President Donald Trump's style of governance leading to sweeping, sectorwide changes that could introduce uncertainty, but also the chance for investors to profit.
"The administration is making a lot of changes in many, many different ways," John Bollinger, president of Bollinger Capital Management, told Investor's Business Daily's "Investing with IBD" podcast. "It just reduces visibility down to almost nothing."
Now, more than 200 days into the second administration, Bollinger says results are mixed. Some sectors like health care are showing signs of uncertainty — and other sectors like homebuilders are painting toward a positive picture.
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The Trump Economy Roils Health Care
Bollinger says health care is a good example of a sector that's being heavily impacted by changes from the Trump Administration. "We have on our candidate list five or six health care stocks that we really like and would really like to own," he said. "But we're going to wait for this to clear up a little bit and for the charts to show some actual potential."
The health care industry has been roiled by ever-shifting policies, including reduced Medicaid spending under the One Big Beautiful Bill Act. Meanwhile, Trump is threatening massive tariffs on drug imports.
"I don't think that health care has tremendous downside, but I think it's going to take quite some time before we can see forward far enough for investors to want to start committing new money to this area," Bollinger said.
"The name of the game is the ability to see forward."
Building On Lower Mortgage Rates
But while health care remains uncertain in the Trump economy, homebuilders are building on strength, says Bollinger. The S&P Homebuilders ETF declined today after a strong Wednesday in the market. This comes after a 177-day cup pattern formed in the ETF's chart that began in November last year.
Tighter immigration controls and rising materials costs due to tariffs roiled homebuilders earlier in the year, while mortgage rates have fallen on a soft jobs report.
"It's a beautiful, big base, and the structure of the chart is just really terrific," Bollinger said. "Since the base was completed, we've just been making higher highs and higher lows."
"That's a favorite sector of mine right now, and I think it's got a lot of potential," he said.
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