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Shares of building material supplier Vulcan Materials Company (NYSE: VMC) and construction crane company Manitowoc (NYSE: MTW) all saw gains in excess of 10% as of 2:00 p.m. EST as part of a post-election bump. Conversely, though, cement company Cemex SAB (NYSE: CX) saw shares decline more than 10%.
Like so many other stocks today, we saw either a big price bump or plunge as the market tries to digest what exactly it means now that President-elect Donald Trump will be headed for the White House. One thing we can surmise is that, based on Trump's speeches and policies related to U.S. infrastructure spending, there is a possibility we will see an uptick in construction activity across the United States -- at least, that's how the markets are betting right now.
Or, at least they think they are by sending up shares of Vulcan Materials and Mantiowoc.
The most curious thing about these movements is that Cemex, a Mexican company, has seen its stock price fall as a result of today's news. Sure, the combination of "Mexican company" and "Trump presidency" might not add up well, but Cemex is also the largest producer of portland cement in the U.S. Vulcan Materials, on the other hand, isn't even in the top 10 in terms of production volume. It should also be noted that Cemex's U.S. operations are much larger than its Mexican ones, so any gains in the U.S. are likely to more than offset any weakness in Mexico.
This little bump and dump of infrastructure stocks goes to show the frequent short-sightedness of the market at times. The simple correlation that a Mexican company would not do well overlooks the fact that its business has more to do with the U.S. economy than Mexico's.
This is why, as individual investors, it's important to avoid any hot-take stock picking. If you're investing for the long term, chances are, your investment time horizon is longer than any presidential administration anyway.
Please, invest accordingly.
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