Executive Summary
 

• The Outcome of the 2024 U.S. election will likely hinge on the results in just a handful of battleground states, including Pennsylvania, Wisconsin, Michigan, Arizona, Nevada, Georgia, and North Carolina. Polls have moved a bit in both directions in the wake of the extraordinary twists and turns of the past few months, but statistically remain a “dead heat.” 

• Though the bulk of the headlines (and polls) are focused squarely on the top of the ticket, the composition of each legislative branch matters too. Key tasks that Congress and the White House must hash through, include addressing the expiration of individual tax cuts initiated in the 2017 Tax Cut and Jobs Act by the end of 2025, and the renegotiation of the U.S., Mexico, and Canada Free Trade Agreement in 2026.

• Asset markets often prefer that the Executive Branch and one, or both, Houses of Congress are controlled by different parties, believing split governance leads to a more balanced approach than the left or right swing that can occur with a single party sweep. One nuance to splitting governance, however, is that the Senate is responsible for approving key cabinet and regulatory body heads, so it could theoretically make life difficult for a president from a different party.

• Both presidential candidates are espousing very different approaches regarding two core issues: tax and tariff policy. While the president does have substantial sway over tariff policy, tax legislation is the purview of Congress, so will entail negotiation and agreement between both branches. 

• While it is tempting to want to tilt investment choices in anticipation of a particular election outcome, mixing politics and your portfolio has a poor record of success. Corporate America — and the markets that reflect it — has survived dozens of election cycles as well as numerous troubling headlines on its long-term march higher. Company progress, and ultimately portfolio performance, is much more closely tied to corporate fundamentals and economic cycles. There will be plenty of time to absorb and adjust to post-election shifts in policy as the Congress and the White House settles in for their new term in early 2025.

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