Voters walk to cast their ballots during early voting for the presidential election at a polling place at the C. Blythe Andrews, Jr. Public Library in Tampa, Florida, the United States, on November 1, 2024.
Octavio Jones | Reuters
Executives at America’s largest companies are speaking out with investors about the presidential election more than in recent cycles.
The word ‘election’ appears on 100 earnings calls S&P 500 Index– Companies that went public between Sept. 15 and Oct. 31, according to FactSet. That’s the highest number of companies mentioning the term on a broad index in that time period, according to CNBC’s screens dating back to the same period in 2004.
As Kamala Harris and Donald Trump go to the polls, average Americans are focused on the economy. Meanwhile, white-collar leaders are considering the potential impact of policy on their businesses while lamenting the widespread uncertainty that the political season brings.
“You might be feeling a little cautious because of the uncertainty about the election and various other factors,” Dover Richard Tobin tell analysts during the specialty manufacturer’s earnings call in late October.
FactSet senior earnings analyst John Butters first noted the number of companies discussing the election in recent weeks. Notably, his data found that executives at S&P 500 companies rarely mentioned Harris or Trump by name when talking about the campaign more broadly.
“cautious” customer
Several companies said consumers and business clients are experiencing an unpredictability about the presidential race.
exist tractor supplyChief Executive Harry Lawton said it expected its clients to remain “cautious” as they have been in past election years. This comes after the farm-focused retailer reported a boost in emergency sales to start the season following Hurricanes Helen and Milton.
Southwest AirlinesMeanwhile, a “trough” in air travel is expected around Election Day, according to operations chief Andrew Watterson. But when it comes to booking trends, royal caribbean CEO Michael Bailey said that historically, presidential elections do not have a long-term impact, although cruise lines may see some volatility during the week of the election.
Southwest Airlines aircraft receive service at the gate at Hollywood International Airport in Fort Lauderdale, Florida, on May 18, 2024.
Gary Hershorn | Corbes News | Getty Images
In addition to Election Day, market participants and business leaders are also paying close attention to the Federal Reserve’s monetary policy meeting next week. tool maker Stanley Black & Decker Chief Executive Donald Allan cited the election and interest rates as reasons for expected “market volatility” in the first half of 2025.
As of Friday evening, CME Group’s FedWatch tool showed there was about a 96% chance that borrowing costs would fall at the November meeting when federal funds futures are priced in. Previously, the central bank issued its first interest rate cut since 2020 in September.
Stanley Black & Decker’s Allen also pointed to Trump’s policy of taxing imports, noting that the U.S. “may implement a new tariff regime.” The Republican candidate said he plans to impose a 20% tariff on imported products, including a super-high 60% tax rate on products from China.
William Grogan, Water Infrastructure Corporation Financial Officer xylemHe said the election was one of the factors that put “a slight pause” on big plans for the industrial market. republic service Chief Executive Jon Vander Ark said the waste company will see “some paralysis in an election year,” but he was optimistic about late 2024 and early 2025.
Pay attention to the economy
More broadly, Eric Ashleman CEO indexThe company, which makes parts ranging from airbags to DNA testing equipment, said the race has not helped recent economic conditions.
Nonfarm payrolls rose at the smallest pace since late 2020 in October due to hurricanes and a Boeing strike. In this spirit, Ikefax said background check volume is softening as senior executives consider what the results mean for their businesses.
“Companies appear to be more cautious about new hiring in the run-up to the election,” Equifax Chief Executive Mark Begor said.
To be sure, some of the “elections” mentioned this year relate to unrelated events like the health care enrollment period. Other companies include software companies Taylor Technologies To the credit card giant American Express said they were not feeling the impact of the election on their business.
“This company has been around a long time,” American Express CEO Stephen Squery told analysts last month. “I mean, obviously, 174 years ago we didn’t have a card. But we’ve been there. Many different elections; many different configurations of House, Senate, etc.”
equity housing Meanwhile, Chief Executive Mark Parrell said state and local governments are more important to businesses than which side wins. In fact, the company is a real estate investment trust that invests in apartments.
go ahead
Still, this cycle appears to have attracted an unprecedented number of leaders from America’s largest businesses. The number of mentions in 2024 is equivalent to about one-fifth of the companies in the S&P 500 mentioning the word “election” during that time.
Dr. Horton Chief Executive Paul Romanowski said buyers are “remaining on the sidelines” given expectations of lower mortgage rates in 2025 and election-related pressures. The homebuilder is trying to stimulate demand by offering mortgages to buy and focusing on building smaller homes, he said.
Another member of Dr. Horton’s top management spoke more bluntly about the election.
“I think everyone is going to be happy that the election is over,” Chief Operating Officer Michael Murray told analysts on the company’s earnings call. “I think it will help with buyers’ mood and ability to make life decisions.”
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