2024 U.S. Presidential Election: Impact on Key Economic Sectors

Policy Changes Affecting the Technology Sector

Policy changes in the technology sector are significantly impacting companies. Meta faces reduced advertising budgets due to Apple's data use policies. Microsoft collaborates with governments to address labor market shifts in the AI era. Amazon highlights the risks of technological errors in law enforcement. Google notes policy changes affecting advertising metrics, while Tesla deals with labor rights issues linked to workplace technology policies.

"For example, in 2021, Apple made certain changes to its products and data use policies in connection with changes to its iOS operating system that reduce our and other iOS developers' ability to target and measure advertising, which has negatively impacted, and we expect will continue to negatively impact, the size of the budgets marketers are willing to commit to us and other advertising platforms." --- (META, sec filing, 2024/Q1)

"I alluded to it before, but we're working with governments across the world and companies, etcetera, to leverage this data that we have, which is, hey, here's how we think the labor market is going to transition and shift over the next decade to help create training programs in countries or work with governments to ensure that they have access to the skills that are necessary for their country to be successful in an AI revolution." --- (MSFT, conference, 2024/06/06)

"When these technologies make errors, they can have drastic consequences, such as wrongful arrests made by law enforcement." --- (AMZN, event transcript, 2024/05/22)

"Changes in cost-per-click and cost-per-impression are driven by a number of interrelated factors including changes in device mix, geographic mix, advertiser spending, ongoing product and policy changes, product mix, property mix, and changes in foreign currency exchange rates." --- (GOOG, sec filing, 2024/Q1)

"Appeals over labor rights violations. Just last month, the NLRB issued a complaint alleging that restrictions in Tesla's Work place technology policies served to unlawfully discourage employees from joining unions or acting conservatively." --- (TSLA, event transcript, 2024/06/13)

Regulatory Impacts on the Healthcare Sector

Regulatory changes are expected to impact healthcare sector growth, benefit levels, and pricing pressures. Companies like UnitedHealth and Humana anticipate challenges in controlling costs and maintaining stability, while Merck and Pfizer highlight the influence of past reforms and out-of-pocket payment dynamics.

"The rate of market growth may be affected by a variety of factors, including macroeconomic conditions and regulatory changes, which could impact our results of operations, including our continued efforts to control health care costs." --- (UNH, sec filing, 2024/Q1)

"Specific to 2025, we expect benefit levels, planned stability and choice for seniors to be negatively impacted by the final MA rate notice, which is not sufficient to address their current medical cost trend environment and regulatory changes." --- (HUM, earning call, 2024/Q1)

"Changes to the U.S. health care system enacted in prior years as part of health care reform, as well as increased purchasing power of entities that negotiate on behalf of Medicare, Medicaid, and private sector beneficiaries, have contributed to pricing pressure." --- (MRK, sec filing, 2024/Q1)

"So that, I think, dynamic that the industry always asks that we contribute to the out-of-pocket payments as long as the patients are paying less because there is a significant benefit for all, for healthcare systems, for patients, for us." --- (PFE, earning call, 2024/Q1)

"The investigation of impacted data is ongoing. It is possible that future risks and uncertainties resulting from the Change Healthcare cyberattack, including risks related to impacted data, litigation, reputational harm, and regulatory actions could adversely affect our financial condition or results of operations. Business Trends" --- (UNH, sec filing, 2024/Q1)

Election Impact on the Energy Sector

Government policies influenced by the 2024 U.S. Presidential Election will significantly impact the energy sector. Companies like NextEra Energy, Chevron, ExxonMobil, Duke Energy, and Tesla highlight the importance of regulatory frameworks on renewable energy, carbon capture, supply chains, and clean energy goals.

"That makes a big impact with the regulator. And while competitors have come and gone, Energy Resources has built a commanding position as a leading renewable energy developer in America over the last 25 years." --- (NEE, Investor Day, 2024/06/11)

"And so we're pleased with both of these. There are markets, maybe to your point about economics that are in some ways heavily influenced by government policy, be it the renewable fuel standard and the Low Carbon Fuel Standard, which affect renewable fuels or some of the things in the investment or the inflation reduction act that affect hydrogen." --- (CVX, earning call, 2024/Q1)

"The harder to carbonize sectors of the economy account for 80% of the world's energy related emissions.And while wind and solar have an important role to play, they are simply not sufficient. Heavy industries need carbon capture and storage." --- (XOM, AGM, 2024/05/29)

"Supply Chain The Company continues to monitor the ongoing stability of markets for key materials and other developments, including public policy outcomes, that could disrupt or impact the Company's supply chain and, as a result, may impact Duke Energy's execution of its capital plan, future financial results or the achievement of its clean energy goals." --- (DUK, sec filing, 2024/Q1)

"And our energy storage deployments reaching an all time high in 2023, with the deployment trend continuing in 2024. By using our products, Tesla customers avoided releasing over 20,000,000 metric tonnes of greenhouse gas emissions in 2023." --- (TSLA, event transcript, 2024/06/13)

Financial Sector Response to Fiscal and Monetary Policies

The financial sector is experiencing significant impacts from fiscal and monetary policies, including elevated uncertainty, higher interest rates, and regulatory pressures. These factors are leading to declines in asset prices, market-making, and investment banking activities, while also affecting deposit stability, net interest income, and wealth revenues.

"If uncertainty and concerns about geopolitical tensions and the economic outlook remain elevated or grow, including those about central bank policy, inflation, the commercial real estate sector, and potential increases in regulatory capital requirements, it may lead to a decline in asset prices, a decline in market-making activity levels, or a decline in investment banking activity levels, and net revenues and provision for credit losses would likely be negatively impacted." --- (GS, sec filing, 2024/Q1)

"I just give the odds much higher than other people. I look at the amount of fiscal and monetary stimulus has taken place over the last 5 years as being so extraordinary." --- (JPM, conference, 2024/05/29)

"Despite tightening monetary policy and ongoing pressure on industry-wide deposits, our total average deposits of $503 billion were stable linked-quarter as we continue to see our efforts to grow consumer-related deposits materialize." --- (USB, earning call, 2024/Q1)

"Turning to Slide 4. Net interest income declined $1.1 billion or 8% from a year ago due to the impact of higher interest rates on funding costs, including the impact of customers migrating to higher yielding deposit products as well as lower loan balances, partially offset by higher yields on earning assets." --- (WFC, earning call, 2024/Q1)

"Wealth revenues increased 2%, driven by a 13% increase in NIR from higher investment fee revenues, partially offset by a 4% decrease in NII from higher mortgage funding costs." --- (C, earning call, 2024/Q2)

Industrial Sector and Infrastructure Spending

Increased U.S. government infrastructure spending and a meaningful industrial policy are driving growth and stability in the industrial sector, with companies like Deere & Company and Honeywell noting healthy markets and significant policy impacts.

"Industry fundamentals remain vastly unchanged with stabilized demand supported by visibility into the balance of the year, and markets continue to be healthy as the U.S. government infrastructure spending further increases." --- (DE, earning call, 2024/Q2)

"Meanwhile, I will say for the first time since the '50s, U. S. Has a meaningful industrial policy, which is shaping a lot of growth in the sector." --- (HON, conference, 2024/05/14)

"Industrial demand is expected to soften relative to a strong 2023. In Transportation, we anticipate high-speed marine to increase as customers continue to upgrade aging fleets. Full-Year 2024 Company Trends and Expectations" --- (CAT, sec filing, 2024/Q1)

"more than $650 million in both our manufacturing facilities and our supply chain this year, reflecting our commitment to strengthening quality and increasing production to better support our customers' long-term needs." --- (GE, earning call, 2024/Q1)

"Payables to suppliers who elected to participate in supply chain financing programs decreased by $0.4 billion during the three months ended March 31, 2024 and increased by $0.1 billion during the three months ended March 31, 2023." --- (BA, sec filing, 2024/Q1)

Consumer Sentiment and the Discretionary Sector

Consumer sentiment in the discretionary sector is cautious, impacting customer traffic and sales (SBUX). Companies are adapting by listening to consumer needs and making strategic adjustments (MCD). Workforce reductions are being reinvested in consumer-facing activities (NKE). Emphasis on variety, quality, and economic propositions remains crucial (DIS), with trends shifting towards battery-powered products (HD).

"in a number of key markets, we continue to feel the impact of a more cautious consumer, particularly with our more occasional customer and a deteriorating economic outlook has weighed on customer traffic and impact felt broadly across the industry." --- (SBUX, earning call, 2024/Q2)

"And so what we're focused on is always is listening to the needs of consumers, making sure we're making the appropriate adjustments in our business to deliver against those needs, and of course, is always ensuring that we can do it better than anyone else." --- (MCD, earning call, 2024/Q1)

"These changes will result in a net reduction of our global workforce. We expect a majority of the future annual wage savings from these actions will be reinvested in consumer facing activities to drive greater impact for our consumers, sports dimensions and the total marketplace." --- (NKE, sec filing, 2024/Q3)

"That was inevitable. The reason it was inevitable because it serves the consumer really well to a point, which is variety, tons, and volume, meaning, and quality too, and for the most part, a good consumer proposition economically." --- (DIS, conference, 2024/05/15)

"We are pleased with the results we saw, particularly in categories like riding lawnmowers and outdoor power equipment, where we had experienced some discretionary pull forward over the last couple of years. The trend away from gas to battery-powered products is continuing." --- (HD, earning call, 2024/Q1)

Agricultural Sector and Trade Policies

The agricultural sector is experiencing significant growth, with projections indicating substantial increases in market size and technological advancements. Investments in precision agriculture and sustainability are enhancing efficiency and profitability. Trade policies, particularly those affecting exports, are expected to influence market prices and overall sector dynamics.

"Economically, the agricultural industry is surging, with analysts at MarketsandMarkets publishing a report that the world's Top 10 Agriculture Markets will grow from US$81.5 billion in 2023 to US$94.23 billion by 2024, showing a year-over-year increase of 15.7%." --- (ADM, press release, 2024/05/30)

"According to analysts at Straits Research the Smart Agriculture Market is projected to reach US$36.24 billion by 2030, growing at a CAGR of 10.8%, while Markets and Markets predicts the Precision Farming Market to grow to US$21.9 billion by 2031, growing at a CAGR of 10.7%." --- (MOS, press release, 2024/05/09)

"And customers there see increased value given the multiple-crop harvest each year as well as the ability to improve efficiency, profitability and sustainability in their operations." --- (DE, earning call, 2024/Q2)

"The investment would be used to pay premiums to farmers and will also finance the provision of free technical assistance, precision agricultural tools and measurement technologies that help producers adopt techniques to reduce emissions." --- (BG, earning call, 2024/Q1)

"if they let exports out, that just further supports higher prices. So I expect you'll see a lower level of Chinese exports throughout the year." --- (CF, conference, 2024/05/15)

Real Estate Sector and Housing Market Trends

High interest rates, supply shortages, and economic fluctuations are moderating the housing market's strength, despite favorable demographics supporting demand. Companies like Redfin and Lennar highlight inventory constraints and affordability issues as key challenges, while CBRE notes the sensitivity of property sales and investments to market cycles.

"So you shouldn't expect those costs to increase. I think going back to our earlier discussion, I think a place where we'll be thoughtful is on the marketing front, which is if we see an improving housing market that is more favorable to marketing spend, but the way we're thinking about the business from this point forward is that in a really bad housing market, we're going to get the business to adjusted EBITDA profits." --- (RDFN, conference, 2024/06/05)

"This is most often the foundation of a strong housing market, but the chronic supply shortage, the impact of interest rates on affordability and persistent and stubborn inflation have moderated housing market strength." --- (LEN, sec filing, 2024/Q2)

"Although higher interest rates and economic fluctuations may persist for some time, the supply of both new and existing homes at affordable price points remains limited, and demographics supporting housing demand remain favorable." --- (DHI, sec filing, 2024/Q2)

"High interest rates continued to weigh on property sales in the Advisory Services segment and investment activities in the Real Estate Investments segment, both of which are sensitive to market cycles." --- (CBRE, sec filing, 2024/Q1)

"Mostly, we think that would be healthy for the housing market because the market has really been held back by inventory so much." --- (RDFN, conference, 2024/06/05)

Future Outlook for Key Economic Sectors

Key economic sectors are poised for growth, driven by innovation and strategic investments. JPMorgan Chase sees continued expansion in cross-border payments and the middle market. ExxonMobil anticipates capital market potential and free market innovation. Amazon's AWS investment will transform multiple industries, while Johnson & Johnson focuses on innovation in healthcare. Caterpillar's financial strategies reflect a cautious yet optimistic industrial outlook.

"And the best part is we are just getting started. In cross border payments and cash pooling, our teams are seeing substantial growth, a trend that we expect to continue as global trade corridors evolve and grow. In key growth areas like the middle market or the innovation economy, we have a major market opportunity to add new clients and deposits." --- (JPM, Investor Day, 2024/05/20)

"Only then will we realize the full potential of capital markets, engaging all sectors and unleashing the innovation of free markets. Hopefully, we'll see more of this in the future. Thanks for that question." --- (XOM, AGM, 2024/05/29)

"This significant investment solidifies Indiana's leadership position in the economy of the future, and will undoubtedly have a positive ripple effect on the town of New Carlisle, the north central region and the state of Indiana for years to come. AWS is the world's most comprehensive and broadly adopted cloud, and its data centers enable customers of all sizes and across all industries, such as automotive, healthcare, manufacturing, financial services, public sector, and more, to transform their businesses." --- (AMZN, press release, 2024/04/25)

"But we believe the combination of those three priorities, advancing our innovation, strengthening our financial performance and simplifying Johnson and Johnson MedTech, are going to be key to continuing on the trajectory that we're on." --- (JNJ, RBC Capital Markets Global Healthcare Conference, 2024/05/15)

"Our share repurchase plans are subject to the company’s cash deployment priorities and are evaluated on an ongoing basis considering the financial condition of the company, corporate cash flow, the company’s liquidity needs, the economic outlook, and the health and stability of global credit markets." --- (CAT, sec filing, 2024/Q1)