As November 5 approaches, mentions of the election change into extra frequent in firm convention calls

Voters walk to cast their ballots during early voting in the presidential election at a polling station at the C. Blythe Andrews, Jr. Public Library in Tampa, Florida, USA, November 1, 2024.

Octavio Jones | Reuters

Executives at America's largest companies are speaking publicly to investors about the presidential election more frequently than in recent cycles.

The word “election” appeared in 100 winning calls S&P 500Public companies traded between September 15 and October 31, according to FactSet. This is the highest number of companies in the broad index to mention the word during this period, according to CNBC screens from the same period since 2004. The US presidential election will take place on Tuesday, November 5th.

The economy is on every average American's mind as they go to the polls and a neck-and-neck race between Kamala Harris and Donald Trump looms. At the same time, executives are considering potential political impacts on their companies while lamenting a general sense of instability that comes with the political season.

“There may be a little bit of caution out there because of election uncertainty and a variety of other things,” Dover CEO Richard Tobin told analysts on the specialty maker's earnings call in late October.

John Butters, senior earnings analyst at FactSet, began by pointing out how many companies have been discussing elections in recent weeks. In particular, his data found that very few executives at S&P 500 companies mentioned Harris or Trump by name and talked about the race more broadly.

“Cautious” customers

Several companies cited a sense of unpredictability surrounding the presidential race among consumers and business customers.

At Tractor supplyCEO Harry Lawton said his client would be expected to remain “prudent” as in past election years. This comes after the agriculture-focused retailer reported a surge in emergency relief sales earlier in the quarter following Hurricanes Helene and Milton.

Southwest AirlinesMeanwhile, the airline expects a “trough” in air traffic around Election Day, according to operations chief Andrew Watterson. But when it comes to booking trends, Royal Caribbean CEO Michael Bayley said presidential elections in the past have not had a long-term impact, although the cruise line may experience some volatility during election week.

Southwest Airlines aircraft are serviced at their gates at Fort Lauderdale-Hollywood International Airport in Fort Lauderdale, Florida, on May 18, 2024.

Gary Hershorn | Corbis news | Getty Images

In addition to Election Day, market participants and business leaders are also closely watching the Federal Reserve's policy meeting next week. Toolmaker Stanley Black & Decker CEO Donald Allan cited both the election and interest rates as reasons to believe markets will be “unsettled” in the first half of 2025.

Fed fund futures are pricing in about a 96 percent chance of a decline in borrowing costs at the November meeting, according to CME Group's FedWatch tool Friday evening. This came after the central bank made its first interest rate cut since 2020 in September.

Allan of Stanley Black & Decker also pointed to Trump's policies on taxing imports, noting that America would “likely be in a new tariff regime.” The Republican candidate has announced plans to impose a 20% tax on imports, with a particularly high rate of 60% on imports from China.

William Grogan, CFO of a water infrastructure company Xylemsaid the election was a factor causing a “little pause” in the industrial market for large projects. Republican Services CEO Jon Vander Ark said the waste management company sees “slight paralysis in an election year” but is optimistic for late 2024 and early 2025.

Watch the economy

More broadly, Eric Ashleman, CEO of indexwhich makes components for everything from airbags to DNA testing machines, said the race has not improved the economic situation recently.

Due to hurricanes and the Boeing strike, non-farm payrolls rose in October by the smallest increase since late 2020. With that in mind, Equifax said the volume of background checks has slowed as executives consider what the result could mean for their company.

“Given the election, it seems like companies are a little more cautious about hiring,” Equifax CEO Mark Begor said.

To be sure, some of the “election” mentions this year were tied to unrelated events, like health care sign-up deadlines. Other companies range from software companies Tyler Technologies to the credit card giant American Express said they felt no impact from the election on the company.

“This company has been around for a long time,” American Express CEO Stephen Squeri told analysts last month. “I mean, of course we didn’t have maps 174 years ago. But we've been in a lot of different elections; in many different configurations of the House of Representatives, the Senate, and so on.”

Equity Residential CEO Mark Parrell, meanwhile, said state and local governments are considered more important to the company than whichever party wins at the top of the ticket. The company is a real estate investment fund with a focus on apartments.

Go forward

Still, this cycle appears to involve a uniquely large number of executives at America's largest companies. The number of mentions in 2024 corresponds to the word “election,” which appeared in calls from about one in five companies in the S&P 500 during that period. This is also more than three times the number of mentions in the same period in 2008.

DR Horton According to CEO Paul Romanowski, buyers are seen “taking a wait-and-see approach” given the expectation of lower mortgage rates in 2025 and the stresses associated with the election. The homebuilder is trying to stimulate demand by offering mortgage buybacks and focusing on building homes with smaller floor plans, he said.

Another member of DR Horton's C-suite was more explicit about the choice.

“I think everyone would be happy that the election is over,” Chief Operating Officer Michael Murray told analysts on the company's earnings call. “I think this will improve shoppers’ mood and empower them to move forward with their life choices.”