As if the prospect of rate reduction, the Fed’s fight against inflation, and keeping up with the AI-fueled stock surge weren’t enough to make investors nervous, impending election-related concerns are causing financial markets to uneasy. There are several reputable accounts on the behaviour of financial markets during US election years. For example, a Morgan Stanley analysis examined data to determine how the S&P 500 performs during election years. According to this study, the stock market performed better during presidential election years from 1928 to 2016. The survey also said that the election of a Republican president led in an average gain of 15.3% for the S&P 500, compared to a 7.6%
T. Rowe Price’s 2020 analysis analysed historical data on the relationship between US elections and the stock market and discovered some interesting trends. According to the analysis, if the stock market does well ahead of US elections, the incumbent party’s chances of remaining in power improve. On the other side, when the stock market is weak before elections, the incumbent party frequently loses. But does this imply President Joe Biden will be able to run for a second term if the Fed starts cutting rates in the summer and equities continue to rise before the election? That would be an incorrect conclusion to draw from this pattern, as the T.
If you asked an ordinary American today about the most hotly debated concerns in the next US election, they would most likely say inflation. However, the election is still many months away, and a lot may change. Morgan Stanley analyst Michael D. Zezas recently stated in a research that expectations for the 2008 elections revolved around US foreign policy. However, the financial crisis altered everything. Similarly, presidential contenders in the 2020 US election emphasised on healthcare and pandemic preparedness.
Fox Corp Class B (NASDAQ:FOX) will benefit significantly from the massive political ad expenditure in the United States leading up to the 2024 elections. A recent Reuters story quoted Insider Intelligence statistics, which said that political advertising spending in 2024 will be 30% more than in 2020. According to the report, 71.9% of total spending will go towards television.
Earlier this month, Fox Corp Class B (NASDAQ:FOX) reported its fiscal second quarter. Adjusted earnings per share (EPS) for the period were $0.34, exceeding expectations by $0.22. Revenue for the quarter declined 8.2% year on year to $4.23 billion, exceeding expectations by $20 million.
Caterpillar Inc. (NYSE:CAT) reaped significant benefits from the Biden administration’s massive infrastructure expenditure plans. Goldman Sachs predicts that if the Republicans win power, infrastructure equities such as Caterpillar Inc. (NYSE:CAT) would continue to increase when the new administration begins border building to halt illegal immigrants.
Caterpillar Inc. (NYSE:CAT) announced its fourth-quarter earnings earlier this month. Adjusted profit increased 35% from the previous year to $5.23 per share, above expectations of $4.75 per share profit.
In November 2023, Goldman Sachs produced a study on the US election and its potential influence on the stock market. Goldman Sachs identified a few stocks that it expects would gain momentum during the election years. MONDELEZ INTERNATIONAL INC Common Stock (NASDAQ:MDLZ) was among these stocks. According to Goldman Sachs, the consumer defensive sector does well during election years.
Defence stocks will be in the limelight due to rising security concerns and a tumultuous geopolitical scenario. The Middle East crisis and the simmering war in Ukraine will continue to force the United States to increase its defence budget, regardless of the outcome of the 2024 Presidential Election.
According to a recent Reuters article, Lockheed Martin Corp (NYSE:LMT) intends to increase weapon system production in order to fulfil increased demand amid escalating security concerns. According to the source, Lockheed Martin Corp (NYSE:LMT) wants to quadruple its manufacturing of High Mobility Artillery Rocket Systems (HIMARS).