Investors should focus on fundamentals amidst election noise - Raymond James
Dow down ~0.5%, S&P 500 slips, Nasdaq now ~flat
Utilities weakest S&P sector; Energy leads gainers
Dollar edges lower; gold edges up; bitcoin off ~2%; crude up ~3%
U.S. 10-Year Treasury yield falls to ~4.32%
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INVESTORS SHOULD FOCUS ON FUNDAMENTALS AMIDST ELECTION NOISE - RAYMOND JAMES
Investors should be focused on market fundamentals, particularly strong corporate earnings growth and recent economic data that support the Federal Reserve's soft landing narrative, regardless of the outcome of the U.S. election, said Raymond James Chief Market Strategist Matt Orton.
Americans will be heading to the polls in droves on Tuesday to choose between former President Donald Trump and Vice President Kamala Harris in addition to deciding the composition of the next U.S. congress.
With the outcome of the contest to close to call, investors have largely remained jittery as demonstrated by elevated volatility across asset classes, including bonds and equities.
Nevertheless, the S&P 500 .SPX is still on track to post the third best election year performance since 1928 and the 17th best year over the same period, with November seasonality helping to support further market gains, Orton said in an investor note.
That is because of a continued favorable macroeconomic environment and a broadening out in strong corporate earnings across a wide range of sectors beyond mega-cap technology and artificial intelligence companies.
"In addition to the wide breadth of earnings beats, it's worth noting that the magnitude of the beats so far has been higher than usual, once the exceptional losses of Boeing BA.N have been stripped out," Orton said.
Thus, investors should expect to see volatility compress across asset classes once markets handle the election results, regardless of its outcome. Cyclical stocks will also likely see more upside buoyed by supportive earnings and the positive macroeconomic backdrop, Orton said.
While remaining overweight U.S. equities, investors can diversify their portfolios with international stocks including India and European financials. Finally, rather than trying to pick winners based on the election outcome, Orton recommended sticking with bipartisan investment themes including defense companies and infrastructure related equities, especially those linked with the build out of A.I, and sectors tied to bringing supply chains back to the U.S.
(Chibuike Oguh)
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FOR MONDAY'S EARLIER LIVE MARKETS POSTS:
AFTER A DOWN OCTOBER, NOVEMBER MAY PROVIDE LITTLE REST FOR THE WEARY - CLICK HERE
FACTORY ORDERS DROP, KEY BUSINESS INVESTMENT METRIC REVISED HIGHER - CLICK HERE
S&P 500 EDGES GREEN AHEAD OF WHAT COULD BE AN EPIC WEEK - CLICK HERE
BENCHMARK TREASURY YIELD: CLEARED THE CLOUD, BUT THRUST QUICKLY SPUTTERS - CLICK HERE
US ELECTIONS: WHAT'S NEXT FOR GOLD - CLICK HERE
INVESTORS REWARD EUROPEAN BEATS MORE THAN PUNISH LOSSES - CLICK HERE
SEMIS DRAG, OIL PROVIDES BUFFER FOR STOXX - CLICK HERE
EUROPE BEFORE THE BELL: FUTURES UP AS PIVOTAL WEEK BEGINS - CLICK HERE
DOLLAR JOLTED BY IOWA SURPRISE - CLICK HERE
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