The S&P500 reached a record high yesterday (November 6) after the announcement of the US election results. The index ended the session with an enhance of 2.53% and closed at 5,929 points. While the index performed well, some U.S. entities did even better. Given the type of stock that has gone up, I think I can learn something about what might happen in this situation.

Takeover potential

The company’s shares were the best performers yesterday Discover financial services. The share price increased by 20%. This also applies Capital firstwhich increased by 15%.

There’s currently a $35 billion deal on the line, with Capital One looking to acquire Discover. This would create the largest credit card issuer in the country in terms of loan volume. However, it is still awaiting government approval. After Trump’s victory yesterday, sentiment is much higher that he may soon give the green lithe to do so. Trump is seen as pro-business and has made this a key political commitment to restarting the economy.

I think this is a really intriguing example of how stocks can move based on the outcome of an election. He emphasizes that politics has an impact on the stock market, including specific situations like this.

Of course, nothing concrete has been done, so yesterday’s price enhance in these two stocks is purely based on speculation. However, given that Discover was the biggest gainer, it shows how crucial a role investors attached to what just happened.

The retail investor’s favorite is back

He was one of the other best players yesterday Tesla (NASDAQ:TSLA). I’m seriously considering buying this stock and really should have bought it earlier this summer when the stock dropped!

Tesla shares are up 30% over the past year, and 15% of that move occurred yesterday. One key factor was the fact that Elon Musk became a vocal supporter of Trump during his campaign. So my impression is that some speculative investors were using Tesla stock to express the view that Trump would win. Similarly, if he lost, I think the stock would lose value.

I do not invest in stocks for the purpose of such speculation. But looking ahead, I think Tesla can do well. I believe that Musk would be close to the president and could influence policy regarding the promotion of electric vehicles. He could also lobby for more government aid, favorable subsidy terms and other factors that should ultimately benefit Tesla.

Tesla may also benefit from some of Trump’s policies, including lower taxes. For some manufacturing facilities in the U.S., it may have a greater competitive advantage over competitors abroad, especially if other companies are hit by tariffs.

As a risk, Tesla stock has a price-to-earnings ratio of 128. This is very high and may indicate that the stock is overvalued.