Repositioning.

That’s the best word I’ve heard to describe what’s going on in the markets right now. The minute the 2016 election was called, investors on both sides immediately put their party affiliation aside and began trying to figure out what comes next.

And the prevailing outlook can only be described as optimistic.

The S&P 500 enjoyed a gain of 3.8% between November 7-11, while the blue-chip Dow Jones Industrial Average bounced 5.4% and the Russell 2000 Index surged 10%. That’s a decent year’s worth of gains in just five trading sessions. Overall, it was the strongest week for both small-cap stocks and giant blue-chip stocks since December 2011.

And the rally continues.

It’s almost forgotten now, but the market suffered a 9-day losing streak leading up to the election. Oh, how quickly investor sentiment changes. But to gain real insight into how the market views a Trump presidency, you have to examine performance on a more granular level.

With that in mind, I want to spend some time today pinpointing the areas of the market that will most likely be affected.

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Potential Losers
Before we get to the likely winners of a Trump presidency, I want to spend just a few minutes discussing sectors that you might want to avoid, at least until we get more clarity on policy positions.

Trump campaigned heavily on a protectionist message of tighter trade sanctions, import tariffs, and a possible renegotiation of the North American Free Trade Agreement (NAFTA). The net impact on the economy remains to be seen, but this certainly has automakers such as General Motors (NYSE: GM) nervous.

Shipping Companies
Trade barriers could raise production costs, crimp margins, and push retail prices to levels that might discourage sales. From a broader perspective, any impediment to global trade will be a headwind for shipping companies.

Solar Power
Clean energy is also widely viewed as a potential loser. The incoming President likely won’t be as generous with government subsidies for alternative energy development. Some of these tax credits and rebates are doled out at the state level, particularly for wind energy. But a likely reduction of Federal incentives and a decreased top-down push for renewable power standards explain why investors have been selling the VanEck Solar Energy ETF (NYSE: KWT).

Healthcare
A major overhaul (or even outright repeal) of Obamacare could be a welcome turn of events for some groups, such as medical device makers. However, big insurers and healthcare providers stand to lose some customers, which is why stocks like Tenet Healthcare (NYSE: THC) are in full retreat.

Silicon Valley
The CEOs of many big tech companies are no fans of Mr. Trump, and the feeling seems to be mutual. Trump has even called for a boycott of Apple (Nasdaq: AAPL). Don’t expect the incoming administration to foster the same zeal as the outgoing for innovations such as self-driving cars. More important, tighter immigration policies may restrict the H-1B Visa program that many tech companies have been using to recruit skilled workers from overseas.

It’s no coincidence the tech-heavy Nasdaq has been the worst performing of the major indexes lately.

Potential Winners
But here’s the real question: which sectors specifically are poised to deliver the biggest gains? Well, I would start with the five groups below.

Fossil Fuels
While President Obama wasn’t entirely hostile to oil and gas, it’s likely that Trump will be far more open to large-scale fracking and pipeline projects. Energy Transfer Equity (NYSE: ETE) has jumped about 19% since the election as investors see greater odds of the firm’s controversial Dakota Access Pipeline gaining approval.

Though we’re short on specifics thus far, Trump seems to have little interest in pursuing his predecessor’s aggressive climate change agenda. This means less talk about discontinuing tax incentives for energy investment, greater access to exploration and drilling on federal land and water, and a cease-fire in the so-called war on coal. Environmental lobbyists will make no headway with policies that Trump feels come at the expense of jobs.

Defense Contractors
On the campaign trail, Trump strongly endorsed rebuilding our U.S. military. And you can bet that defense hawks in Congress will be eager to accommodate the new President’s wishes.

#-ad_banner-#The Pentagon spent about $599 billion last year, accounting for roughly half of federal discretionary spending. The Department of Defense (Dod) budget is likely to increase in size over the next few years as Trump carries out his proposals for military expansion.

Of course, the Commander in Chief doesn’t act unilaterally, and there are budget caps and sequestration measures pertaining to defense spending. Still, military procurement dollars will be plentiful. That’s why analysts are already upgrading defense contractors such as Lockheed Martin (NYSE: LMT), which makes everything from ground vehicles to guided missile systems to the next-generation F-35 fighter jet.

Since the election, the stock has already vaulted to nearly $266 from under $240. And it has company.

Infrastructure
In speech after speech, Trump called attention to the dire need to “rebuild our highways, bridges, tunnels, power lines, airports, schools and hospitals.” As President, he will make upgrading dilapidated infrastructure a top priority and likely goal of his first 100 days.

Specifically, Trump will ask Congress to pass a new “American Energy & Infrastructure Act,” which utilizes tax incentives and public-private partnerships to spur $1 trillion in infrastructure investment over the next 10 years.

Luckily, this is one of the few areas where both parties see common ground. There is broad, bipartisan support for infrastructure spending (despite some squabbles on where the financing comes from). In any case, Trump’s $1 trillion plan is a huge endorsement for copper, steel, and other basic construction materials.

There is a multitude of investment opportunities within this space, from raw commodities producers like Freeport-McMoRan (NYSE: FCX) to Martin Marietta (NYSE: MLM), a leading supplier of concrete, asphalt and cement. Infrastructure spending will also mean billions in revenues for major engineering and construction outfits like Fluor (NYSE: FLR).

Pharmaceuticals
Drugmakers are breathing a sigh of relief, as Hillary Clinton was expected to introduce regulations that would have clamped down on profits in this sector. By contrast, Trump appears to be more willing to strike a balance between patient affordability and maintaining the financial incentive needed to spur lifesaving new medicines and therapies.

In other words, Trump will be less strict on drug pricing.

More than that, he wants to expedite the notoriously slow approval process at the Food and Drug Administration (FDA). Trump wants to “cut the red tape” and get approval-pending medicines to the people who need them sooner. That means the development pipeline of pharmaceuticals and biotech drug developers could start turning into revenues faster than expected.

Financial Services
Perhaps more than any other sector, the financial group has been most impacted by oppressive regulatory overhauls. A new Labor Department Fiduciary Law set to take effect next April places further constraints on Broker/Dealers like Merrill Lynch and asset management companies such as AllianceBernstein (NYSE: AB).

A surprising Trump victory has brought optimism that this new law will be repealed or scaled back. In addition, a new financial services policy team has been tasked with “dismantling the Dodd-Frank Act and replacing it with new policies to encourage economic growth and job creation.”

In the meantime, there will be a more immediate benefit. In a welcome turn of events for banks, the same policies that stimulate growth will also lead to higher interest rates.

Generally speaking, rising rates mean wider interest rate spreads — which means bigger profits for lenders. The prospect of lighter regulation, a steeper yield curve, and lower corporate taxes has been referred to as an earnings growth “trifecta.”

That upbeat outlook has triggered a strong rally in the financial sector. Our High-Yield Investing stake in PacWest Bancorp (Nasdaq: PACW), for example, has surged more than 28% since November 4. And we could see much more. Rafferty Capital Markets is predicting widespread gains of up to 100% in the banking sector over the next 36 months.

Rest assured, I’ll be combing through each of these five areas in the weeks and months ahead. And my High-Yield Investing subscribers will be the first to know of any changes we make to the portfolio. If you’d like to gain exclusive access to my latest picks and analysis, simply follow this link to learn more.