You may or may not want to vote on Tuesday. People are stressed out. Also, companies are, at least in some ways.
A FactSet study released on Friday found that 116 S&P 500 companies have used the word “election” or “elections” during their quarterly earnings calls in the last 15 months. “A slowdown or pause in economic, business, or customer activity due at least in part to the election,” said 38 of them. These companies ranged from airlines to tool makers to big brewers.
Still, that study found that many executives expect a rebound after this week, no matter what happens. A lot of people say that the election is just one of many things that affect business trends.
Polls show that Vice President Kamala Harris and past President Donald Trump are going to be very close. People across the country are still worried about the economy and rising costs of living, and this election comes at a time when people are also getting ready for any trouble that might happen afterward, even if the results aren’t contested.
On eBay Inc.’s EBAY 1.04% earnings call last week, CEO Steve Priest said, “Our outlook also includes a challenging operating environment due to persistent economic headwinds and several one-off dynamics in Q4,” such as more people paying attention to the U.S. elections and this year’s shorter holiday shopping season because of Hurricane Milton in early October.
During last week’s earnings call for homebuilder D.R. Horton Inc. DHI -0.80%, CEO Paul Romanowski said that buyers are still waiting out higher prices in a tight market, in part because of the election.
“Mortgage rates have gone down since the beginning of the year, but many people who want to buy a home think rates will be even lower in 2025,” he said. “We think that some buyers are staying away from the market for the time being because of the swings in interest rates and the general lack of certainty during election season.”
The COO, Michael Murray, later said, “I think everyone would be happy that the election is over.” I believe that will make the buyer feel better and allow them to move forward with their choice.
Mike Santomassimo, chief financial officer of Wells Fargo & Co. (WFC -0.37%), also said that people and businesses would feel a little better after the election.
“Once the election is over, rates start to go down,” he said. “I think all of those things will work together to make clients feel better about either building up their inventory or making more capital investments that they’re putting off right now.”
On other earnings calls, air carriers Southwest Airlines Co.
LUV 0.10%
and United Airlines Holdings Inc. UAL 2.81% say they expect a brief pullback in travel around the election. IBM said that the election was one of the “temporary” things that had made people less likely to spend extra money and hurt its consulting business. The company that sells Corona and other alcohol brands, Constellation Brands Inc. (STZ 0.19%), said, “When there is a federal election that is close, people often pull back.”
According to the FactSet study, other executives were trying to figure out how tariffs, which are a key part of Trump’s economic plan, would affect tax, energy, health, and rent control policies in California. Also brought up were retirement plans and antitrust rules, which have become stricter under the Biden government.
But it’s obviously hard to tell what effect a new government will have because of all the campaign promises and vague policy talk, and it’s also not clear who will be in Congress yet. When asked about tariffs, Nicholas Pinchuk, CEO of Snap-On Inc., a company that makes tools and equipment, may have spoken for a lot of business people.
“What the hell do you know?” Who knows? “You know what I mean?” he asked on last month’s news call for the company.
He said, “You hear a lot of different things.” “We’re not going to tax tips; we’re not going to tax overtime; we’re going to control prices; we’re going to ding the supermarket; we’re going to tax unrealized capital gains; we’re going to tear up the world. Thank you for coming to the Mad Hatter’s tea party.
Later, he added, “Of course, it will take some getting used to if they tear up everything in the world.”
Numbers to keep an eye on
The surprise election of Donald Trump in 2016 was good for the biggest news outlets because investors and viewers were ready for more trouble in the White House. Fears of a pandemic led to more subscribers for some of those outlets in 2020. A few months after the election that year, management at the New York Times Co. said that interest was still pretty high.
We might get a better idea of whether those trends will continue this time when the New York Times NYT 1.77% and other news companies report this week. These include Fox News parent company Fox Corp. FOX -0.18% and News Corp NWS 0.14%, which owns MarketWatch and the Wall Street Journal. The gap between the biggest media companies and smaller, struggling local ones is still very big.
People are usually very interested in elections because they are big political events. The Times and other news sites have tried to find ways to keep people reading after the elections. In addition to increasing its news coverage, the Times, for example, gives readers access to games and cooking recipes. And last week, Gannett Co. Inc. GCI -0.21%, the company that owns USA Today and local news outlets, said that this year’s most unique users had been there for reasons that had nothing to do with politics.
Still, when Fox Corp. was asked about political ad spending in August, they said, “We would expect a record political cycle this year, even without a runoff in Georgia.” At that time, News Corp, which owns the book company HarperCollins, also said that JD Vance’s book “Hillbilly Elegy” had seen a “resurgence of interest,” selling 150,000 copies in the 24 hours after Vance was named Trump’s running mate.
The book sold 877,000 copies in July, the company said, which would help News Corp.’s fist-quarter numbers.
