Voters walk to cast their ballots during early voting in the presidential election at a polling place at the C. Blythe Andrews, Jr. Public Library in Tampa, Florida, U.S., November 1, 2024.
Octavio Jones | Reuters
Executives of America’s largest companies are publicly talking with investors about the presidential election more than in recent cycles.
The word “election” appeared during 100 results calls from S&P500-companies listed between September 15 and October 31, according to FactSet. This is the most companies in the general index mentioning the word during this period, according to CNBC screens from the same period dating back to 2004. The US presidential election will take place on Tuesday, November 5.
The economy is on the minds of ordinary Americans as they head to the polls in what is shaping up to be a neck-and-neck race between Kamala Harris and Donald Trump. At the same time, white-collar executives are considering the potential impacts of policies on their businesses, while lamenting the general uncertainty that comes with the political season.
“Because of the election uncertainty and various other things, you may feel a bit of caution.” Dover Richard Tobin, CEO told analysts during the specialty manufacturer’s earnings call at the end of October.
John Butters, FactSet’s senior earnings analyst, first highlighted the number of companies discussing the election in recent weeks. Notably, its data revealed that very few executives at S&P 500 companies mentioned Harris or Trump by name, talking about the race more generally.
“Cautious” customers
Several companies cited a sense of unpredictability related to the presidential race among consumers and business customers.
HAS Supply of tractorsCEO Harry Lawton said his client had to remain “cautious” like in previous election years. This comes after the agriculture-focused retailer reported an increase in emergency response sales early in the quarter following Hurricanes Helene and Milton.
Southwest Airlinesmeanwhile, expects a “dip” in air travel around Election Day, according to chief operating officer Andrew Watterson. But when it comes to booking trends, Royal Caribbean CEO Michael Bayley said presidential elections have historically had no long-term impact, although the cruise line could see some volatility the week of the contest.
Southwest Airlines planes are serviced at their gates at Fort Lauderdale-Hollywood International Airport May 18, 2024, in Fort Lauderdale, Florida.
Gary Hershorn | Corbis News | Getty Images
Besides Election Day, market participants and business leaders will also be closely watching the Federal Reserve’s monetary policy meeting next week. Tool maker Stanley Black & Decker CEO Donald Allan cited both the election and interest rates as reasons to anticipate “choppy markets” in the first half of 2025.
Fed funds futures price in about a 96% chance of a decline in borrowing costs at the November meeting, according to CME Group’s FedWatch tool Friday evening. This comes after the central bank in September published its first rate cut since 2020.
Allan from Stanley Black & Decker also highlighted the import tax policynoting that America would “probably be in a new tariff regime.” The Republican candidate said he planned impose a 20% tax on imports, with a very high rate of 60% on those from China.
William Grogan, CFO of a water infrastructure company Xylemsaid the election was a factor creating a “small pause” in the industrial market for large projects. Services of the Republic CEO Jon Vander Ark said the waste disposal company is seeing “a little bit of paralysis in an election year,” but he’s optimistic for late 2024 and early 2025.
Watch the economy
More broadly, Eric Ashleman, CEO of Hintwhich makes components for everything from airbags to DNA testing equipment, said the race hasn’t helped the economy recently.
The non-farm payroll increased by smallest number of jobs in October dating back to the end of 2020 due to hurricanes and the Boeing strike. In this vein, Equifax said it has seen some weakness in background check volumes as executives consider what the result may mean for their business.
“As the election approaches, it seems like companies are being a little more cautious about new hires,” said Mark Begor, CEO of Equifax.
To be sure, some mentions of “elections” this year were tied to unrelated events, like health care sign-up periods. Other companies ranging from software publisher Tyler Technologies to the credit card giant American Express said they had not felt the impacts of the election on the business.
“This company has been around for a long time,” American Express CEO Stephen Squeri told analysts last month. “I mean, obviously, we didn’t have maps 174 years ago. But we’ve been in many different elections; many different configurations of the House, the Senate, etc.”
Equity Residential CEO Mark Parrell, meanwhile, said state and local government are considered more important to the company than whichever party wins at the top of the ticket. In fact, the company is a real estate investment trust which invests in apartments.
Moving forward
Yet this cycle appears to involve a particularly high number of executives at America’s largest companies. The number of mentions for 2024 is equivalent to the word “election” during that period appearing in calls for about one in five companies within the S&P 500. It’s also more than triple the number of references during the same period in 2008.
Dr Horton sees buyers ‘stay away’ given expectations of a decline mortgage rates in 2025 and election-related stress, according to CEO Paul Romanowski. The homebuilder is trying to spur demand by offering mortgage buyouts and focusing on building homes with smaller floor plans, he said.
Another member of DR Horton’s leadership spoke about the election more directly.
“I think everyone would be happy that the election is over,” Chief Operating Officer Michael Murray told analysts on the company’s earnings conference call. “I think this will improve buyer sentiment and their ability to move forward with their life decision.”
