Election Insights: The Countdown to November
As the 2024 election draws near, the landscape is rapidly evolving. With polls tight and the economy in focus, both campaign operatives and voters are bracing for what could be a pivotal election cycle. As in our previous election-themed article from this Spring "Insights for Investors on the 2024 Election", which you can review by clicking HERE, this is not meant to provide any personal political commentary, but to look at the potential impact of the upcoming election for the economy, and for you as an investor. Here's an overview of the key themes shaping the final weeks of the race.
A Shift in Candidate Dynamics The decision by President Joe Biden not to seek re-election significantly altered the 2024 race. As a result, this election is no longer a referendum on an incumbent. Instead, Harris and Trump are competing in an environment where market and political uncertainties loom large. This shift has investors watching closely for policy developments, though there is little consensus on how each candidate’s platform might impact markets. However, the market as a whole continues to appear more concerned with current economic data such as corporate earnings, interest rates, and inflation. This focus seems to have been confirmed when the swing in polling data did little to change market sentiment.
Key Congressional races are also up for grabs, with narrow Democratic control in the Senate and narrow Republican control in the House. The outcome could result in unified government control or a continued split, and this uncertainty has further complicated predictions.
Economic Issues & Campaign Narratives The monthly jobs report has become a key driver of political narratives, with both Vice President Kamala Harris and former President Donald Trump seizing on the latest data. While August saw 142,000 jobs added*, this fell short of expectations. Harris hailed the creation of almost 16 million new jobs since her administration took office, while Trump warned of "Kamala-induced recession" fears. The recent September jobs report came in higher than expected with 254,000 jobs added*. Yet, experts argue that voters’ decisions are unlikely to hinge on minor economic shifts. As the Federal Reserve recently enacted a rate cut to help cool inflation, both campaigns are focusing heavily on voter perceptions of economic health rather than the data alone.
With one more jobs and inflation report due before Election Day, the race remains tight and unlikely to swing based on these updates, barring any shocking results either way. Historical trends show that despite the mixed economic signals, voter sentiment often differs from hard data, adding unpredictability to the race's outcome. Voters that are still undecided on who they are voting for are more likely to base their decision on personal experiences, such as inflation impacting their household finances, or a family member struggling from a job loss, rather than what any broader government report tells them.
Voter Priorities & Divisive Issues Voter priorities for the 2024 election highlight deep divides between supporters of Trump and Harris. For Trump voters, the economy (93%), immigration (82%), and crime (76%) are top issues. In contrast, Harris voters emphasize healthcare (76%), Supreme Court appointments (73%), and abortion rights (67%) as major concerns, alongside the economy (68%).t
Over the past four years, issues like immigration and abortion have become more prominent. Immigration has surged in importance for Republicans, while Democrats have doubled down on abortion following the overturning of Roe v. Wade. These issues, along with confidence in each candidate’s ability to address them, will play a critical role in the coming weeks.
What’s at Stake? While the economy leads as a top issue, voters are looking at multiple factors. With no single-issue voters making a substantial impact, the election outcome may hinge on broader sentiments across multiple fronts: tax policy, trade, healthcare, and energy. Tax cuts and corporate tax policies proposed by Trump aim to extend the provisions of the 2017 Tax Cuts and Jobs Act, while Harris has introduced policies focused on expanding tax credits for families and small businesses. The differences in fiscal approach reflect the differing priorities in their respective voter bases.
On tariffs and trade, Trump’s policies remain focused on a more protectionist agenda to boost trade revenue and help overcome the federal deficit, with Harris leaning towards balanced tariffs to boost domestic industries. Energy policy is another area of distinction: Trump promises fossil fuel expansion, while Harris looks to further renewable energy development. This is likely to be one of the more predictable stock market sectors based on election results, as the opposing proposed policies will benefit or hinder specific companies and sub-sectors within the energy industry.
Final Stretch With just weeks remaining before Election Day, the atmosphere is charged. Political operatives, investors, and voters are closely watching the candidates' moves. While past election cycles show that markets tend to weather political shifts, it’s the specific policies and party platforms that may influence which sectors win or lose. With such a closely contested race, even small shifts in voter sentiment could make the difference.
With this in mind, it’s become increasingly important to avoid overreacting to political news and election results. Maintaining a balanced, long-term view and plan for your portfolio has historically put you in a much better financial position than attempting to time market cycles correctly. Our team is keeping a close eye on the results and corresponding market sentiment, and we welcome you to reach out to us with any questions you may have.
We encourage you to stay informed, stay engaged, and make sure your voice is heard this November.
*Statistics derived from www.bls.gov U.S. Bureau of Labor Statistics
t Statistics derived from Pew Research Center “Issues and the 2024 Election”
Investment advice is offered through Belpointe Asset Management, LLC. 500 Damonte Ranch Parkway, Building 700, Unit 700, Reno, NV 89521 All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness, or reliability cannot be guaranteed.