Election Insights: Stocks Tracking Primary Outcomes

Portfolio Manager Marc Pinto explains why equity markets have historically tended to be strong during an election year, particularly when there is an incumbent candidate. He also discusses how stocks are reacting to day-to-day changes in the polls and shares his views on what we could expect given the potential outcome.

Key Takeaways

  • In the coming months, we expect the stock market’s focus on the election to intensify as the Democratic primary season progresses.
  • Should one of the more progressive candidates win the nomination, we expect more upheaval in the markets, particularly in health care and financial services.
  • While short-term macro events clearly have the potential to destabilize stocks, we think companies with sustainable revenues and cash flow should have the durability to push through choppy markets.