The Pulse

Insights Into Investor Mindsets

From investment considerations in an election year to watching the Fed’s next move, what’s impacting the market?

The latest research from Lincoln Financial Group from its quarterly Overview of Market Trends.

July 08, 2024 — RADNOR, Pa.–(BUSINESS WIRE)–Today, Lincoln Financial Group (NYSE: LNC) released its quarterly edition of Market Intel Exchange, a comprehensive analysis of market trends and themes currently on the minds of investors, curated from the company’s investment expertise and industry-leading asset management partnerships. In conjunction with the Market Intel Exchange, Jayson Bronchetti, Chief Investment Officer, shares a high-level overview of the themes, using visuals from the report in the company’s CIO Perspectives video.

Key insights from the latest edition of the Market Intel Exchange include:

  • Investment considerations during an election year: With the 2024 presidential election in full swing, investors are keeping a close eye on how the results may affect investment portfolios and various market sectors. Research from the report shows that in past election years, the average return for the S&P 500 was 11.5% — only modestly lower than the average return in every calendar year since 1928. This year, stocks were up more than 15% in the first half, and S&P 500 companies reported their strongest year-over-year earnings growth rate since early 2022 in the first quarter. As investors wait to see who the next U.S. President will be, history shows that the economic backdrop and fundamentals drive capital markets – not the short-term political noise elections tend to bring with them. Investors who stayed the course and avoided the temptation to sit on the sidelines during election years have historically been rewarded with better investment outcomes1.
  • The economic backdrop drives Fed action, not elections: Investors are wondering if decisions on monetary policy may be influenced by the upcoming presidential race. The Federal Reserve has consistently demonstrated its independence from political agendas, rather focusing on its dual mandate of price stability and maximum employment. This autonomy is critical, as it helps ensure that decisions are made based on what’s believed to be in the best interest of the economy, not on who is running for office. Since 1980, the central bank has adjusted interest rates in every election year except 2012, when rates were near zero and the economy was still healing from the global financial crisis. This historical trend helps highlight the unwavering commitment to their dual mandate, prioritizing the health of the economy over political motives.
  • Tracking economic trends in anticipation of the Fed’s next move: A handful of key data points on growth, inflation, the consumer and the labor market can help investors keep a pulse on the health of the overall economy and the likelihood of any potential shifts in monetary policy. This quarter’s report tracks these top economic trends in anticipation of the Fed’s next move. While the economy remains resilient, recent trends show a slowing – but still growing economy – while Federal Reserve Chair Powell continues to emphasize that the decision on the rate outlook will be very data-dependent and met with a cautious approach.
As investors wait to see who the next U.S. President will be, history shows that the economic backdrop and fundamentals drive capital markets – not the short-term political noise elections tend to bring with them...

“Lincoln has long-served as a trusted source of experience and thought leadership on economic trends for our stakeholders, our sales force and our customers – a role we take very seriously. Through our longstanding relationships with our asset management partners, along with our internal team of seasoned investment professionals, we are proud to continue to provide financial professionals and their clients with the deep-dive perspectives needed when making important investment decisions,” said Bronchetti.

More insights from Lincoln Financial and its network of asset management partners can be found on the Market Insights page on LincolnFinancial.com.

 

 

About Lincoln Financial Group
Lincoln Financial Group helps people to plan, protect and retire with confidence. As of December 31, 2023, approximately 17 million customers trust our guidance and solutions across four core businesses – annuities, life insurance, group protection, and retirement plan services. As of March 31, 2024, the company had $310 billion in end-of-period account balances, net of reinsurance. Headquartered in Radnor, Pa., Lincoln Financial Group is the marketing name for Lincoln National Corporation (NYSE: LNC) and its affiliates. Learn more at LincolnFinancial.com.
LCN-6758221-070224
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1 Source: Lincoln Financial Group Market Intel Exchange, July 2024

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