Corporate America Weighs in on the Upcoming Presidential Election
As the nation prepares to head to the polls, executives from the country’s largest companies are speaking out about the potential impact of the presidential election on their businesses. According to FactSet, the word “election” was mentioned on 100 earnings calls of S&P 500-listed firms between September 15 and October 31, the highest number of companies to do so during this timeframe in recent history.
A Sense of Caution
Many CEOs are expressing caution about the uncertainty surrounding the election, citing its potential impact on consumer and business confidence. Dover CEO Richard Tobin noted that the election, combined with other factors, is contributing to a sense of caution in the market. Similarly, Tractor Supply CEO Harry Lawton expects customers to remain “prudent” in the lead-up to the election, as they have in past election years.
Industry-Specific Concerns
Different industries are approaching the election with varying levels of concern. Southwest Airlines, for example, expects a decline in air travel around Election Day, while Royal Caribbean CEO Michael Bayley believes that the election will have no long-term impact on booking trends. In the manufacturing sector, Stanley Black & Decker CEO Donald Allan cited the election, along with interest rates, as reasons to anticipate “choppy markets” in the first half of 2025.
Federal Reserve Meeting Looms
In addition to the election, market participants and business leaders are also closely watching the Federal Reserve’s monetary policy meeting next week. Fed funds futures are pricing in a roughly 96% chance of a decrease to the borrowing cost at the November meeting, which could have significant implications for businesses and consumers alike.
Tariffs and Trade Policy
Some executives are also concerned about the potential impact of trade policy on their businesses. Stanley Black & Decker’s Allan noted that America would likely be “in a new tariff regime” under Trump’s presidency, which could affect the company’s bottom line.
Industrial and Construction Sectors
In the industrial and construction sectors, companies are seeing a slowdown in activity due to the election. Xylem CFO William Grogan noted that the election is creating a “little bit of a pause” in the industrial market for big projects, while Republic Services CEO Jon Vander Ark said the waste disposal company sees “a little bit of paralysis in an election year.”
Economic Backdrop
The election is also affecting the broader economic backdrop. Nonfarm payrolls grew by the smallest number of jobs in October since late 2020, and Equifax reported softness in background screening volumes as executives consider the potential implications of the election on their businesses.
A Mixed Bag
While many companies are expressing caution about the election, others are taking a more optimistic view. American Express CEO Stephen Squeri, for example, noted that the company has been around for a long time and has weathered many elections. Equity Residential CEO Mark Parrell, meanwhile, believes that state and local government is more important to the business than which party is victorious on the top of the ticket.
A Unique Election Cycle
This election cycle appears to be engaging a uniquely high number of leaders within corporate America’s largest firms. The 2024 mentions count equates to the word “election” coming up on calls of around one in every five companies within the S&P 500, more than triple the number of references during the same period in 2008. As the election approaches, it remains to be seen how these companies will be affected by the outcome.
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