The week started badly with my T212 portfolios down £7k but they have since recovered to about the same level as at the start of the week.
T212 ISA
T212 Invest account
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| This years revenue and profits should show great promise! |
Due to the sells, I still have £4.5k in cash in this account.
Recent new buys in my Invest account are shown below (ignore LunR as I didn't buy it)...
Future thoughts
The Middle-East oil/gas situation seems worse. Trump seems to rock the boat even more with Ukraine/Russia/China using his usual playground bully tactics. Inflation seems inevitable. The AI fears are not real, but I think many AI IPOs may delayed this year. The AI industry is just spreading Fear and Doubt to provide an excuse for delaying IPOs.
Intel, HPE, Lenovo, Micron and Sandisk have moved up this week. Netflix suffered a loss however despite raising it's prices in UK, U.S., Canada, Argentina and Portugal. This should bump up profits on the next quarter's report nicely but Netflix are also spending a lot on new content. If the price continues to drop to the $60-65 range, I will buy some more. If we are in for high inflation, people will stay in more and watch TV as long as they can still pay their rent, energy and food bills!
I still plan to take profits on AI/memory/storage stocks when possible. I am happy with my positions with miners/minerals/materials/metals and assorted ETFs. I hold some Defence stocks (Thales, BA, SEI) and for the longer term some nuclear/uranium stocks (OKLO, etc.) and energy infrastructure companies (e.g. Eaton).
The problem with an Invest GIA account is that I will be taxed at 18% or 24% CGT. However, our current Prime Minister, Andy Burnham, may raise the CGT rate in the next budget, so I would rather have a tidy up of my gaining holdings this month and if CGT rates do go up in October 2026, any sells which are losses can also be sold (as losses will effectively save me more if they occur within the higher CGT rate period). If the higher tax rate CGT is increased (say to 40pc) then I will also try to reduce my trading frequency within my GIA. This means buying less volatile stock such as world ETFs and holding them for as long as possible, rather than trading stocks like miners or defence companies, etc. I will use my tax free ISA account for more cyclical/thematic trading.
Apart from my top world index ETFs on T212, my largest holding in the T212 Invest account are shown below...
and in my ISA...
I bought Corning just before a large price drop, but it is a very healthy and undervalued company with good expected future profits.
I probably have almost 100 different stocks in my two Trading 212 portfolios. This was by design as I wanted diversification.
Trump
A poor performance for the incumbent party in the midterm elections would likely shift the U.S. toward a period of legislative gridlock, heighten political friction and increase short-term market volatility as investors adjust to the new governing reality.
During this period, I prefer to be holding a pot of cash which means I now have 40 days to build up that pot. I would expect that once things become clearer after the mid-terms and we have a clear path to progress, the stock market will become bullish but meanwhile we may have extreme volatility.
Historically, markets have often been weak or volatile during midterm years and stronger after the uncertainty is resolved. That is a tendency but not a reliable forecast. A post-election rally would be more likely if investors concluded that:
- Major tax increases are unlikely
- New tariffs will be limited
- The Federal Reserve can reduce rates
- Corporate earnings remain strong
- A government shutdown or debt-ceiling crisis is avoided
- Impeachment proceedings
- A constitutional or institutional crisis
- Tariff escalation
- Retaliatory trade measures
- Government shutdown threats
- Falling corporate earnings
- Rising inflation and bond yields
Bottom line: the highest volatility would probably be concentrated in clean energy, semiconductors and AI, metals and mining, defense, oil and gas, pharmaceuticals, regional banks and speculative nuclear companies. A divided government could ultimately be less damaging to broad equities than feared, but the path there could be turbulent. The election itself is unlikely to determine the S&P 500’s long-term direction as decisively as interest rates, earnings and the global economy.
Basically, no one has any idea what will happen. Looking out 6 months or so, once we have a sense of direction and stability, the US and World economy should improve. This means I may have the ability to buy cheap shares this year - if only I knew which ones to buy!
The standard advice is to go for the essentials: staples, commodities, energy, property and health, with some gold for insurance.
Here is ChatGPT's summary on any likely volatility (which really doesn't help me much!):
| Sector | Likely volatility | Why |
|---|---|---|
| Energy: oil and gas | High | Tariffs, sanctions, drilling policy, LNG approvals, emissions rules, OPEC/global demand, and geopolitical events |
| Renewables and clean energy | Very high | Tax credits, subsidies, permitting, electric-vehicle policy, and possible attempts to repeal or restrict climate programs |
| Metals and mining | High | Tariffs on imported metals, China policy, infrastructure spending, critical-mineral subsidies, and the dollar |
| Gold and silver | High | Inflation expectations, interest rates, dollar movements, fiscal stress, geopolitical risk, and political instability |
| Nuclear industry | High | Federal loan guarantees, reactor approvals, fuel supply, uranium policy, defense spending, and bipartisan energy-security support |
| Defense and aerospace | High | Defense appropriations, Ukraine and other foreign-policy decisions, procurement priorities, and congressional oversight |
| Technology and AI | High | AI regulation, export controls on China, semiconductor subsidies, antitrust action, data rules, and tariffs on hardware |
| Health care and pharmaceuticals | High | Drug-pricing legislation, Medicare policy, insurance subsidies, FDA regulation, and potential antitrust measures |
| Financials and banks | High | Interest-rate expectations, fiscal policy, bank regulation, capital rules, and the yield curve |
| Communications and media | Moderate to high | Telecom regulation, spectrum policy, data privacy, platform regulation, and political scrutiny of media companies |
| Utilities | Moderate to high | Interest rates, clean-energy incentives, grid spending, nuclear policy, and regulated pricing |
| Broad commodities | High | Tariffs, China growth, the dollar, global manufacturing, inventories, and supply disruptions |
| Industrials and transport | High | Tariff exposure, reshoring incentives, infrastructure spending, labor costs, and global trade |
Areas that could move the most
1. Clean energy, solar, wind and electric vehicles
These may be among the most politically sensitive stocks. A Republican electoral defeat could reduce the probability of repealing existing clean-energy incentives, potentially benefiting:
- Solar and wind developers
- Battery manufacturers
- Electric-vehicle supply chains
- Grid and transmission companies
- Energy-efficiency businesses
However, if divided government leads to legislative deadlock, the market may focus less on new legislation and more on existing tax credits and agency implementation. Companies with weak balance sheets could remain highly volatile even if the political outcome is favorable.
2. Oil and gas
Oil and gas stocks could initially react to expectations about:
- Drilling permits and leasing
- LNG export policy
- Pipeline approvals
- Refinery and emissions regulations
- Sanctions and foreign-policy decisions
- Strategic petroleum-reserve policy
But the oil price itself will usually matter more than Washington for producers. OPEC decisions, global demand, inventories, wars, and supply disruptions can overwhelm the election effect.
A divided government could be moderately favorable for traditional energy if it reduces the chance of major new climate legislation. On the other hand, political conflict or geopolitical escalation could create large price swings.
3. Metals, mining and critical minerals
Mining and metals companies could experience substantial volatility because they sit at the intersection of:
- Tariffs
- China policy
- Infrastructure spending
- Defense supply chains
- Electric vehicles and batteries
- Critical-mineral subsidies
U.S. steel and aluminum producers could benefit from protectionist policies, while manufacturers that consume those materials could suffer from higher costs. Copper, lithium, nickel, rare earths and uranium could be especially sensitive to changes in industrial policy and China-related restrictions.
4. Gold and silver
Gold and silver are not simply “Republican” or “Democratic” trades. They respond mainly to:
- Real interest rates
- Federal Reserve policy
- Inflation expectations
- The U.S. dollar
- Fiscal concerns
- Geopolitical risk
- Investor demand for hedges
A poor result for Trump could initially support gold and silver if it increases political uncertainty, impeachment risk, or concerns over institutional conflict. But if markets interpret the result as reducing the likelihood of aggressive fiscal or tariff policies, Treasury yields and inflation expectations could fall, potentially weakening precious metals.
Gold may behave more defensively; silver is generally more volatile because it is also an industrial metal.
5. Nuclear energy and uranium
Nuclear-related stocks could react sharply, but this area has some bipartisan support because of:
- Energy security
- Grid reliability
- Carbon reduction
- Competition with China and Russia
- Defense and naval applications
A divided Congress may make new major subsidies or appropriations harder to pass, but it would not necessarily reverse existing nuclear policy. Uranium miners, reactor developers and nuclear-equipment companies can be especially speculative, so their share prices may move far more than the underlying political change justifies.
6. Defense stocks
Defense companies could be volatile around the election, but the likely reaction is not straightforward.
Potentially supportive factors include:
- A larger defense authorization bill
- Higher spending on missiles, ships, aircraft and drones
- China-related military competition
- European and NATO spending
- Continued foreign military assistance
Potentially negative factors include:
- Congressional demands for spending cuts
- Delays in appropriations
- Investigations into procurement
- Disputes over foreign aid
- Pressure to reduce overseas commitments
Large defense contractors may be less sensitive than smaller companies whose revenues depend on a few contracts. Drone, cybersecurity, missile-defense and space companies may show particularly large percentage moves.
7. Technology and AI
Technology may be one of the most actively traded groups after the midterms, especially:
- Semiconductors
- AI infrastructure
- Data centers
- Cloud computing
- Cybersecurity
- Chinese-exposed hardware companies
- Social-media and platform companies
The key issues would be:
- Export controls on advanced chips
- Tariffs on imported components
- Semiconductor incentives
- AI safety and liability rules
- Antitrust enforcement
- Data privacy
- Government technology procurement
A Republican loss could reduce the likelihood of rapid deregulation or aggressive executive action, but a divided government may also make major technology legislation less likely. That could be positive for some large platforms, while export controls and tariffs could remain executive-driven.
High-valuation AI companies may be especially sensitive because their prices depend heavily on interest rates and future earnings expectations. Even a politically favorable election result would not protect them from a valuation correction.
8. Health care and pharmaceuticals
Health-care volatility would likely concentrate in:
- Pharmaceutical companies
- Health insurers
- Pharmacy-benefit managers
- Hospitals
- Medical-device firms
- Biotech companies
The main issues are drug-price negotiation, Medicare, Medicaid, Affordable Care Act subsidies, insurance rules and FDA policy.
If Republicans lose congressional control, the probability of passing major new health-care legislation may fall. That could reduce immediate legislative risk for some insurers and drug companies. However, oversight, hearings and administrative actions could continue, and individual companies could still face litigation or pricing pressure.
Biotechnology is often more sensitive to interest rates and clinical-trial results than to midterm politics.
9. Financials
Banks, brokers, insurers and private-credit companies could respond primarily through the bond market.
Important transmission channels include:
- Treasury yields
- Inflation expectations
- The yield curve
- Bank-capital requirements
- Mergers and acquisitions
- Consumer-credit conditions
- Financial-regulatory appointments
A divided government may reduce the chance of major new financial legislation, which could be welcomed by banks. But if investors expect weaker fiscal expansion, Treasury yields could decline, affecting banks differently depending on the yield curve.
Smaller regional banks may be more volatile than large diversified banks because they are more exposed to commercial real estate, deposit competition and regulatory changes.
10. Communications and media
Telecom and communications companies could move on:
- Spectrum auctions
- Broadband funding
- Net-neutrality rules
- Data privacy
- Platform regulation
- Media ownership
- Political advertising
The large platforms may face continued legal and regulatory uncertainty regardless of which party controls Congress. Traditional media companies could be particularly sensitive to election-related advertising revenue, audience shifts and political scrutiny.
11. Utilities
Utilities are usually less election-sensitive than technology or energy, but they can still move significantly through interest rates.
They may benefit from:
- Lower Treasury yields
- Grid-investment programs
- Nuclear support
- Transmission spending
- Stable demand from data centers
They may suffer from:
- Higher rates
- Fuel-cost increases
- Delayed regulatory approvals
- Political opposition to rate increases
- Rising wildfire or climate-related liabilities
Utilities with large data-center exposure could trade partly like technology infrastructure companies rather than traditional defensive stocks.
What could happen immediately after the election?
A plausible sequence is:
- Before the vote: volatility rises as polls and control of Congress change.
- Election night: futures and sector ETFs react first to the surprise element, not necessarily to the final policy implications.
- Following weeks: markets reprice tariffs, fiscal policy, interest rates, investigations and the likelihood of legislative gridlock.
- Several months later: macroeconomic factors—employment, inflation, Federal Reserve policy, earnings and oil prices—usually become more important than the election itself.
The biggest short-term moves would likely occur in small-cap, highly leveraged, policy-dependent and richly valued companies, rather than in diversified mega-cap companies.
Tariff-sensitive groups
If a poor Republican result makes new tariff legislation less likely, that could help companies dependent on imported inputs, including:
- Retailers
- Consumer electronics
- Automakers
- Machinery producers
- Construction-material users
- Semiconductor hardware firms
- Solar and battery manufacturers
But a president may retain substantial authority to impose or modify tariffs through executive action. Therefore, a loss of congressional support would not necessarily mean tariffs disappear. The market may instead price in:
- Fewer new tariffs
- More court challenges
- Delayed enforcement
- Retaliation risk
- Greater uncertainty over exemptions
Companies benefitting from protection—such as certain domestic steel, aluminum or industrial producers—could underperform if investors expect tariffs to be reduced.
Would the S&P 500 rise or fall?
Both outcomes are plausible:
- Short term: likely higher volatility and potentially a negative initial reaction if the result is unexpected or accompanied by impeachment threats, government shutdown risk or tariff uncertainty.
- After the result is absorbed: a divided government can sometimes be welcomed because it reduces the probability of abrupt major legislation.
- Longer term: earnings, inflation, interest rates, AI investment, oil prices and global growth are likely to dominate the election effect.
Historically, markets have often been weak or volatile during midterm years and stronger after uncertainty is resolved. That is a tendency, not a reliable forecast. A post-election rally would be more likely if investors concluded that:
- Major tax increases are unlikely
- New tariffs will be limited
- The Federal Reserve can reduce rates
- Corporate earnings remain strong
- A government shutdown or debt-ceiling crisis is avoided
A selloff would be more likely if the election is followed by:
- Impeachment proceedings
- A constitutional or institutional crisis
- Tariff escalation
- Retaliatory trade measures
- Government shutdown threats
- Falling corporate earnings
- Rising inflation and bond yields
Another area I want to buy into is cybersecurity. Sooner or later AI is going to cause major security breaches across multiple companies/governments/countries. There will be multiple major data leaks (if it hasn't happened already) and there will be a massive scare about Ai and cybersecurity. The way to fix this is by using security software and hardware plus AI to find and plug weaknesses. The downside is that if AI manages to bypass the security measures of any one antivirus/antispam/firewall company, that companies share price will plummet (and then probably recover).
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