Election trading is over, earnings trading begins: I’m waiting for just one signal

With Democrats winning both chambers and Republicans holding the White House, the moment a “divided government” became reality, the market was trading not policy benefits but the fading of uncertainty. The dollar weakened, Treasury yields fell, and BTC staged a V-shaped rebound from around $75,600 to above $80,000, as risk appetite indeed recovered. But one assessment from Yinhua Investment Advisory is crucial: this recovery started with a convergence of sentiment and capital flows, not an improvement in earnings, making it more of a “sentiment recovery” than a “trend reversal.”

So, now that the election-driven market rally has temporarily run its course, I’m shifting all my attention to earnings.

My ranking for the next market leaders is clear: AI infrastructure and cloud platforms > chips (selectively) > electric vehicles (watchlist).

Cloud and AI infrastructure are among the few areas where demand visibility is high enough and is already being validated by earnings. Microsoft Azure’s growth hit 48%, with guidance for the next quarter raised further to 49%–50%; commercial remaining performance obligations grew 73% year over year, and free cash flow was positive. This shows that AI investment is not all disappearing into capital expenditures; data is confirming that leading cloud providers are finding ways to monetize it. By contrast, Alphabet had negative free cash flow of $9.1 billion in the quarter, while Amazon’s trailing-12-month free cash flow swung from an inflow of $14.8 billion to an outflow of $42.3 billion. The market is already punishing the “spend without seeing returns” AI narrative through share prices. Even within AI, cash flow strength is becoming the dividing line.

I won’t treat all chips the same. Demand for Nvidia’s computing power remains real, but the post-election market snapshot showed Nvidia down about 3.1% and Micron down about 7%, indicating that investors are selectively taking profits within the chip sector, rather than buying indiscriminately. The areas truly worth tracking are those backed by clear orders and profits, not every stock carrying an “AI” label.

I’m putting electric vehicles further down the list for now. Tesla’s third-quarter deliveries were still down year over year, and automotive revenue fell 3% year over year. The autonomy narrative (FSD, Robotaxi) has long-term potential, but at this stage it is more of an individual-stock thesis than a sector-wide leadership theme.

Back to the trading plan: I won’t chase sentiment spikes, but I also won’t sit entirely in cash and wait.

My approach is to participate in stages and with conditions. First, I’ll only touch companies with sound balance sheets and cloud or AI businesses already generating positive cash flow; second, I won’t chase the first green candle after the election—I’ll wait for a low-volume pullback that holds above the previous low, or enter after earnings confirm the guidance; third, I’ll add to positions in two or three installments rather than betting at one price. If earnings disprove the thesis or guidance is lowered, I’d rather miss the early gains than hold a position on “hope.”

The election gave the market a window to catch its breath, but the next real leaders won’t be chosen by political headlines; they’ll be chosen by guidance and cash flow on earnings calls. Until the signal appears, keeping powder dry matters more than chasing sentiment.

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