Traders work on the floor of the New York Stock Exchange on October 24, 2024.
Brendan McDermid | Reuters
Less than two weeks before the US presidential election and voters decidedly dividedsome investors are naturally afraid.
“It’s likely to cause a bit of turbulence in the markets,” Jordan Jackson, global markets strategist at JP Morgan Asset Management, told CNBC. Event Your money THURSDAY.
On Wednesday, the Dow Jones suffered its biggest one-day loss since early December, dropping more than 400 points. The S&P 500 fell almost 1% and the Nasdaq lost 1.6%. As of mid-afternoon Thursday, the Dow Jones was headed for its fourth straight decline, while the S&P and Nasdaq were up slightly.
If history is any guide, “when you look at previous election cycles, even though you have that turmoil leading up to the election, you almost uniformly get markets that rebound at the end of the year,” Jackson said.
As Election Day approaches, 72% of American investors say they are worried about the presidential election, according to a study. investigation of the F&G life insurance company.
But the best solution is to “stay the course,” Jackson advised.
“The markets are resilient,” he said.
Despite November’s turbulence, looking at the bigger picture, “there are a number of reasons to be optimistic,” Jackson said.
For starters, Jackson says, more interest rate cuts are likely to follow. the Fed’s half-percentage-point cut in September, if inflation indicators cooperate. The annual rate of CPI inflation was 2.4% in Septembera marked improvement from the peak of 9.1% reached in June 2022.
“It tends to be a really good backdrop,” Jackson said.
Additionally, “things are looking pretty good from a business fundamentals perspective,” he said, although “we have to be careful about making big sector bets based on the rhetoric we hear during the election campaign.
“But again, I think when we look at the broader context and track earnings, there are more all-time highs in the market at the end of this year and even more all-time highs over the next year “Jackson said. said.
For consumers, it will take longer to adapt to price pressures, although wages are on the rise and unemployment is weak.
“I think over the next year we should continue to see consumers start to feel a little more confident about their wallet share and what they’re able to spend,” Jackson said .
