Stocks Slip Ahead of Election Day
The major stock market averages closed lower on Monday, with the Dow Jones Industrial Average losing nearly 258 points, or 0.6%, and the Nasdaq Composite and S&P 500 both slipping about 0.3%. The market volatility suggests that investors are hesitant to make big bets ahead of the U.S. presidential election on Tuesday.
According to Andrew Smith, chief investment strategist at Delos Capital Advisors, the market’s movement over the past few weeks does not point to a clear election winner, and the volatility is likely to continue even after the election is decided. He believes that the market needs more “market clearing events” for investors to get the “green light” to move forward.
Additionally, Raymond James strategist Javed Mirza said in a note to clients that the stock market appears to be in the early stages of a pullback, citing ongoing deterioration in market breadth and weakening investor sentiment. Meanwhile, Bank of America strategist Savita Subramanian noted that while mentions of weak demand have spiked, there are signs of a “bottom” and that the worst in de-stocking is likely behind us.
Despite the market’s uncertainty, some analysts remain optimistic about the earnings season. Bank of America’s Subramanian reported that consensus earnings per share is now up 2% compared to October 1st, tracking 6% year-over-year, in line with the bank’s forecast. Additionally, the strategist noted that results from tech giants like Microsoft, Alphabet, Amazon, and Meta point to a multiyear artificial intelligence investment phase.
