Webinar

Fall 2024 Post-Election Webinar

Gauging the market impact of election results.

At a glance

The S&P 500 reached another all-time high last week on a solid U.S. jobs report and rising expectations for another Federal Reserve interest rate cut this month.

Number of the week:

8.2%

The increase in earnings for S&P 500 companies in the third quarter compared to a year earlier.

Term of the week:

Consumer sentiment

A statistical measure of the overall health of the economy as determined by consumer opinion. It takes into account people's feelings toward their current financial health, the health of the economy in the short-term and the prospects for longer-term economic growth, and is widely considered to be a useful economic indicator.

Quote of the week:

Consumer sentiment improved in December in the University of Michigan Consumer Sentiment Index to the highest reading since April, the fifth consecutive month of progress. Year-ahead inflation expectations jumped to 2.9% (highest reading in six months) from prior month's 2.6%. The index is still low and below pre-pandemic levels, perhaps reflecting ongoing concerns about elevated prices.

Robert Haworth, CFA, Senior Vice President, Senior Investment Strategy Director, U.S. Bank

Global economy

Quick take: U.S. payrolls rebounded in November, and consumer sentiment improved but remains below pre-pandemic levels. Global purchasing manager surveys affirmed strength in services but ongoing stagnation in manufacturing.

Our view: Growth in the United States and India remains exceptional while other major economies, including China, Europe, Japan and the United Kingdom, demonstrate modest but positive economic expansion despite elevated interest rates.

Equity markets

Quick take: U.S. equity performance remains superb and broad based as holiday shopping shifts into high gear.

Our view: The fundamental backdrop remains supportive of a risk-on (aggressive) bias. Inflation is waning, interest rate cuts are in motion and earnings are trending higher, all bolstering sentiment and providing valuation support. Near term, price volatility is likely to be more the norm, with new administration policies emerging, the holiday selling season in full motion and geopolitical tensions heightened.

Bond markets

Quick take: Short-term Treasury yields fell last week, reflecting greater confidence that the Federal Reserve (Fed) will cut interest rates December 18.

Our view: Fundamental and technical tailwinds from resilient economic growth, constructive corporate balance sheet health and strong investor demand create opportunities in higher yielding but slightly riskier bonds.

Real assets

Quick take: Prices fell across many real asset categories last week, including publicly traded real estate, global infrastructure and commodities. For real estate and global infrastructure, the decline was small in comparison to strong returns over the past year.

Our view: Publicly traded real estate provides investors a meaningful and steady source of income with continued economic expansion supporting fundamentals. Real asset exposures can also diversify portfolios by helping protect against inflation risks.

Based on our strategic approach to creating diversified portfolios, guidelines are in place concerning the construction of portfolios and how investments should be allocated to specific asset classes based on client goals, objectives and tolerance for risk. Not all recommended asset classes will be suitable for every portfolio. Diversification and asset allocation do not guarantee returns or protect against losses.

Past performance is no guarantee of future results. All performance data, while obtained from sources deemed to be reliable, are not guaranteed for accuracy. Indexes shown are unmanaged and are not available for direct investment. The S&P 500 Index consists of 500 widely traded stocks that are considered to represent the performance of the U.S. stock market in general. The S&P Global Purchasing Managers' Index data are compiled by IHS Markit for more than 40 economies worldwide. The monthly data are derived from surveys of senior executives at private sector companies. The Institute of Supply Management Manufacturing Index, also called the Purchasing Manager's Index, measures manufacturing activity based on a monthly survey, conducted by the Institute for Supply Management, of purchasing managers at more than 300 manufacturing firms. The Michigan Consumer Sentiment Index is a monthly survey of consumer confidence levels in the United States conducted by the University of Michigan. The survey is based on telephone interviews that gather information on consumer expectations for the economy.

Insights from our experts

How we approach your long-term investing success

We use a data- and process-driven three step methodology to develop an investment strategy unique to you.

The debt ceiling debate in focus

With the U.S. government’s authority to borrow money bumping up against the federally mandated debt limit this year, is a political confrontation brewing that could impact capital markets?

Analysis: Assessing inflation’s impact

Persistently higher prices continue to weigh on consumers and policymakers alike.

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Disclosures

Investment products and services are:
Not a deposit • Not FDIC insured • May lose value • Not bank guaranteed • Not insured by any federal government agency

U.S. Wealth Management – U.S. Bank is a marketing logo for U.S. Bank.

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This information represents the opinion of U.S. Bank Wealth Management. The views are subject to change at any time based on market or other conditions and are current as of the date indicated on the materials. This is not intended to be a forecast of future events or guarantee of future results. It is not intended to provide specific advice or to be construed as an offering of securities or recommendation to invest. Not for use as a primary basis of investment decisions. Not to be construed to meet the needs of any particular investor. Not a representation or solicitation or an offer to sell/buy any security. Investors should consult with their investment professional for advice concerning their particular situation. The factual information provided has been obtained from sources believed to be reliable but is not guaranteed as to accuracy or completeness. U.S. Bank is not affiliated or associated with any organizations mentioned.

Based on our strategic approach to creating diversified portfolios, guidelines are in place concerning the construction of portfolios and how investments should be allocated to specific asset classes based on client goals, objectives and tolerance for risk. Not all recommended asset classes will be suitable for every portfolio.

Diversification and asset allocation do not guarantee returns or protect against losses.

Past performance is no guarantee of future results. All performance data, while obtained from sources deemed to be reliable, are not guaranteed for accuracy.

Equity securities are subject to stock market fluctuations that occur in response to economic and business developments.

International investing involves special risks, including foreign taxation, currency risks, risks associated with possible differences in financial standards and other risks associated with future political and economic developments. 

Investing in emerging markets may involve greater risks than investing in more developed countries. In addition, concentration of investments in a single region may result in greater volatility.

Investments in fixed income securities are subject to various risks, including changes in interest rates, credit quality, market valuations, liquidity, prepayments, early redemption, corporate events, tax ramifications and other factors. Investment in fixed income securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term securities. Investments in lower-rated and non-rated securities present a greater risk of loss to principal and interest than higher-rated securities.

Investments in high yield bonds offer the potential for high current income and attractive total return, but involve certain risks. Changes in economic conditions or other circumstances may adversely affect a bond issuer’s ability to make principal and interest payments.

The municipal bond market is volatile and can be significantly affected by adverse tax, legislative or political changes and the financial condition of the issues of municipal securities. Interest rate increases can cause the price of a bond to decrease. Income on municipal bonds is free from federal taxes, but may be subject to the federal alternative minimum tax (AMT), state and local taxes.

There are special risks associated with investments in real assets such as commodities and real estate securities. For commodities, risks may include market price fluctuations, regulatory changes, interest rate changes, credit risk, economic changes and the impact of adverse political or financial factors. Investments in real estate securities can be subject to fluctuations in the value of the underlying properties, the effect of economic conditions on real estate values, changes in interest rates and risks related to renting properties (such as rental defaults).

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The information provided represents the opinion of U.S. Bank and is not intended to be a forecast of future events or guarantee of future results. It is not intended to provide specific investment advice and should not be construed as an offering of securities or recommendation to invest. Not for use as a primary basis of investment decisions. Not to be construed to meet the needs of any particular investor. Not a representation or solicitation or an offer to sell/buy any security. Investors should consult with their investment professional for advice concerning their particular situation.

U.S. Bank and its representatives do not provide tax or legal advice. Your tax and financial situation is unique. You should consult your tax and/or legal advisor for advice and information concerning your particular situation.