“Election Buzz: How November 5 is Shaping Corporate Conference Calls”

Executives from some of the largest corporations in the United States are increasingly vocal about the presidential election, engaging more openly with investors compared to previous cycles.

The term “election” appeared in 100 financial reports from companies in the S&P 500 between September 15 and October 31, as reported by FactSet. This is the highest frequency of mention during that timeframe since 2004, as noted by CNBC. The presidential election is set to take place on Tuesday, November 5th.

As citizens prepare to vote, economic factors are at the forefront of their minds, amid a tightly contested race between Kamala Harris and Donald Trump. Business leaders are also assessing how potential policies might affect their operations while expressing concerns about the uncertainty that often accompanies this political climate.

“There seems to be a bit of caution prevailing due to the unpredictability stemming from the election and various other factors,” said CEO Richard Tobin of Dover during a recent earnings call in late October.

John Butters, a senior earnings analyst at FactSet, highlighted the number of companies addressing the election recently, noting that very few executives from the S&P 500 are discussing the candidates by name.

Many businesses have pointed out a growing sense of unpredictability among both consumers and commercial clients due to the upcoming presidential election.

Harry Lawton, CEO of Tractor Supply, remarked that customers are likely to remain “cautious” this election season. This comment followed an increase in sales from emergency response products earlier in the quarter due to hurricanes Helen and Milton.

Meanwhile, operations chief Andrew Watterson of Southwest Airlines conveyed expectations of a “trough” in air travel surrounding the election period. Conversely, Royal Caribbean CEO Michael Bailey mentioned that while historical patterns suggest no extended impact from elections, cruise lines might face some fluctuations during the campaign week.

In addition to Election Day considerations, market stakeholders and corporate leaders are keenly observing the upcoming meeting of the Federal Reserve regarding monetary policy. Donald Allan, CEO of toolmaker Stanley Black & Decker noted that both the upcoming election and changing interest rates are likely to lead to “market volatility” in the first half of 2025.

As of Friday evening, futures data indicated there’s a 96% likelihood of lower borrowing costs at the November meeting, following the federal bank’s first rate reduction since 2020 last September.

Allan also highlighted President Trump’s proposed trade policies concerning imported goods, anticipating possible shifts to a new tariff system. The Republican candidate has suggested a 20% tariff on imports and a 60% tariff on goods coming from China.

William Grogan, CFO of Water Infrastructure Company Kibe indicated that the election contributes to “a bit of a pause” in large-scale industrial projects. Similarly, John Vander Ark, CEO of Republic Services expressed expectations that waste management firms may experience some hesitation during an election year, though he remains optimistic for late 2024 and early 2025.

On a larger scale, CEO Eric Ashlman of Idex noted that recent electoral events have not resulted in any improvements for their economic outlook.

Following the latest data, October showed the slowest growth in nonfarm payrolls since late 2020 due to a combination of hurricanes and strike actions at Boeing. In this context,

Equifax has reported a decline in background check figures, as business leaders contemplate the implications for their operations.

“With the upcoming election, I believe companies are exercising more caution in their hiring practices,” remarked Mark Begor, Equifax’s CEO.

Interestingly, some mentions of “elections” this year were related to unrelated matters, such as the health insurance enrollment period. Other tech firms like Tyler Technologies have also noted this cautious climate. In contrast, major credit card issuer American Express expressed that the election has had no significant influence on their operations.

“Our company has a rich history,” stated Stephen Squeri, CEO of American Express, during a recent analyst briefing. “While credit cards didn’t exist 174 years ago, we have navigated various elections amidst changing compositions of the House and Senate.”

Stock Housing has a different perspective. CEO Mark Parrell noted that local and state governments are becoming increasingly significant for business than the outcomes of higher-tier elections. His firm, a real estate investment trust specializing in condominiums, reflects this trend.

This election cycle stands out for the sheer number of corporate leaders discussing its implications. The word “election” has been referenced in roughly 20% of S&P 500 company earnings calls this season, an increase that more than triples the mentions recorded in the 2008 cycle.

DR Horton‘s CEO, Paul Romanowski, observed that prospective buyers are adopting a “wait-and-see” stance due to anticipated drops in mortgage rates in 2025, along with the anxieties raised by the election. He stated that the company is working to stimulate demand through mortgage buybacks and focusing on designing more compact homes.

Another executive at DR Horton expressed a more straightforward view of the election’s effect.

“Once the election is concluded, I think there will be a sense of relief among everyone,” said Chief Operating Officer Michael Murray during an earnings call. “It will likely ease the emotional pressures on buyers and aid them in making future life choices.”