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It’s election day. That statement contains a host of implications but when it comes to the stock market, it’s actually a moot point. Today’s edition unpacks why.

(Make sure you go vote today if you haven’t!)

Stocks climb during every White House

The presidential election brings high stakes and political uncertainty, yet Wall Street won’t be adjusting its upbeat outlook for the stock market based on who takes the White House. 

While Goldman Sachs estimates that Harris could be worse for S&P 500 earnings than Trump, the difference remains negligible.

The benchmark index has enjoyed its best performance for an election year in history, and both fundamentals and seasonality suggest that strength will carry into 2025.  

Over the last week, Opening Bell Daily has reached out to a dozen strategists, investors and portfolio managers, and not one holds a bearish view on equities over the next 12 months. 

“Although markets dropped in the immediate aftermath of the 2016 election and struggled to find direction in the days of uncertainty following the 2020 election, on both occasions markets then delivered four years of solid gains,” said Christian Floro, market strategist at Principal Asset Management.

Data from Carson Research shows the S&P 500 has moved higher the following year after nine of the last 10 presidential elections, with an average gain of 15.2%.

Kevin Gordon, senior investment strategist at Charles Schwab, told me that market breadth remains a key and promising component to the current bull-run. 

The share of S&P 500 companies trading above their 200-day moving averages has hovered between 60-80% for most of the year, which is “rare” and “a strong sign,” Gordon said. Market leadership has broadened since investors rotated from Big Tech into cyclicals this summer. 

“It’s still a young bull market,” he added. “It’s taken a long time for most sectors to participate, and that to me suggests there’s more fuel left.” 

Meanwhile, corporate earnings have continued to impress through the third quarter.

About three in four S&P 500 companies have beat earnings estimates, and the index is seeing year-over-year earnings growth for the fifth quarter in a row, according to FactSet.

And while November 5 has been the biggest circle on the calendar for months, the Federal Reserve is making what’s widely expected to be a 25-basis-point interest rate cut on November 7. 

That — as well as the expectation for more rate cuts to come — is jet fuel for stocks. 

“Regardless of the election outcome we think the main drivers of the equity bull market will remain in place: durable economic growth, disinflation/Fed rate cuts, and AI adoption,” said David Lefkowitz, the head of US equities at UBS Chief Investment Office. 

His team maintains an S&P 500 forecast of 6,600 for December 2025, representing about a 15% gain from Monday’s closing price. 

Comments or feedback? Reply directly to this email or let me know on X @philrosenn.

Elsewhere:

📉Stocks tumbled the day before the election. Big volatility should come as no surprise to traders, given the heightened uncertainty with the White House and Federal Reserve the same week. Look for more choppy trading in the days ahead.

🏦 Wall Street sees Trump winning. A survey of 119 investors, family offices, and private-equity firms taken in October shows 53% of respondents predict the former president to win the White House over Harris. The respondents also said a Trump administration creates a favorable environment for companies in the fossil fuels, financial, and industrial sectors. (Business Insider)

👀 Are “bond vigilantes” returning? Some analysts see a scenario in which rising fiscal deficits and a global trade war could mean higher inflation and surging bond yields. That outlook has raised concerns that traders could force the government’s hand by off-loading government debt. (CNBC)

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Rapid-fire:

• Palantir stock surged in after-hours trading after strong earnings and a revised annual revenue forecast (Reuters)

• World governments are $100 trillion in debt combined (Barron’s)

• Shares of Trump Media & Technology surged more than 10% Monday (Yahoo Finance)

• Home sales are up compared to the same time last year (Housing Wire)

• Uber proposed a 6.1% cut to the base pay of New York City drivers due to falling gas prices (Bloomberg)

• JPMorgan cautioned that a Trump victory could cause the Fed to pause its rate-cutting cycle (Business Insider)

Election odds according to Kalshi, the biggest US prediction market:

Last thing:

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