Good morning. It’s Election Day. And for some Americans, that comes with a considerable dose of anxiety, economic and otherwise.
Monarch, a personal finance app and website, shared with me data from its survey of 1,500 Americans ages 18-44 conducted in September and October. Millennials (48%) are cutting back on spending in areas like entertainment, dining out, or subscriptions due to the presidential election or economic uncertainty, while 37% of Gen Z is cutting back on these categories.
Nearly a quarter (23%) of all respondents are delaying major purchases like homes and cars until after the election. And millennial women (regardless of political leaning) are most concerned about their current financial status (57%).
The U.S. economy has been growing solidly, but could election anxiety have an impact?
Up until the third quarter, consumer spending was really the main engine of U.S. growth, Gregory Daco, chief economist at EY-Parthenon, told me. If we start to see more caution in spending, it doesn’t necessarily mean that we’re going to have any form of downturn, Daco said. “But if consumers are more prudent, then growth will be slower,” he said.
Peter Ricchiuti, a finance professor at Tulane University’s A.B. Freeman School of Business, thinks this is the best economy in six decades, given the stock market gains and inflation dropping from 9.1% to 2.1%, he said.
I asked him about some consumer caution in spending ahead of the election. “I haven’t seen anyone talk about this until this election,” Ricchiuti told me. “I’ve been doing this for 45 years.”
Political misinformation has been going on for a long time, Ricchiuti said. “But making economic decisions based on misinformation is really dangerous,” he said. “Maybe that’s what’s holding some people back.” He said it’s the middle class that determines economic health, so making that segment economically confident is important.
‘Focus on what you can control’
Regarding post-election potential volatility in the markets, I also asked Daco and Ricchiuti if they had any advice for CFOs.
“It’s nearly impossible to prepare for the broad range of potential scenarios post-election, but you can focus on what you can control,” Daco said. Ensuring you have a robust planning process, you’re managing cash flow, preparedness for any potential scenarios, and agility in reacting to potential policy developments—“that’s really all you can do as a CFO,” he said.
Ricchiuti thinks that CFOs are in better shape now for whatever happens because there were “real lessons learned in COVID,” he told me. “And everybody kind of runs the shop a little cleaner,” he said.
It’s corporate earnings that move the stock market, Ricchiuti said. “The rest of it is noise,” he said. “It’s like the first three quarters of an NBA game—it just doesn’t matter.”
Sheryl Estrada
[email protected]
Upcoming event: Join at the Fortune Global Forum, convening Nov. 11 and 12 in New York City. Thought-provoking sessions and off-the-record discussions feature Fortune 500 CEOs, former Cabinet members and global Ambassadors, and 7x world champion Tom Brady–among many others. See the full agenda here, or request your invitation.
The following sections of CFO Daily were curated by Greg McKenna
Leaderboard
Rachita Sundar was appointed CFO of software company Qualtrics, a leading online survey tool, effective immediately. She succeeds Rob Bachman, who spent 11 years at the company before departing in August to take time off with family, according to his LinkedIn profile. Sundar arrives from HubSpot, where she served as a SVP of financial planning and analysis (FP&A), and previously spent more than a decade in finance leadership roles at Microsoft.
Deniz Terlemez was promoted to interim CFO of Marti Technologies (NYSEAM: MRT), a Turkish transportation app, effective immediately. He succeeds former CFO Oguz Erkan, who the company thanked for his integral contributions after arriving at the company in May. Terlemez most recently served as the company’s finance director. Previously, he was a senior finance manager at Reef Technology, overseeing the software company’s Middle East operations.
Big Deal
Investors bought more than they sold in all eleven sectors of the S&P 500, according to monthly sector rotation data from electronic trading platform E*Trade. Traders jumped on opportunities after the index dipped near the end of an otherwise strong month, according to Chris Larkin, E*Trade’s managing director of trading and investing.
“Interest in real estate shot up as rates took a hit along with weakness in the sector,” he said. “We saw interest in utilities increase, a historically defensive sector, likely driven by uncertainty ahead of the election. And traders eyed opportunities in materials, particularly in gold-related stocks.”
Going deeper
“What Lies Ahead for the Federal Debt, Interest Rates, and the U.S. Economy,” is a recent episode in the podcast series Policies at Work from the Wharton School of the University of Pennsylvania. Jeremy Siegel, professor emeritus of finance, and Knet Smetters, professor of business economics and public policy and faculty director of the Penn Wharton Budget Model, assess the feasibility of campaign promises made by both Kamala Harris and Donald Trump.
Overheard
“I have never even considered retiring, not once. It simply isn’t in my decision set. I am in excellent health. I have a lot of energy, and I am in a very good position financially. But most importantly, I love working.”
—Julie Wainwright, the CEO and cofounder of Ahara.com, writes in the Fortune opinion piece titled, “Count me among the boomers not retiring. I’m in my 60s and leading another startup.”
