Investing

Traders work on the floor of the New York Stock Exchange. 

Stocks @ Night is a daily newsletter delivered after hours, giving you a first look at tomorrow and last look at today. Sign up for free to receive it directly in your inbox.
Here’s what CNBC TV’s producers were watching as Wall Street awaited the results of the U.S. election, and what’s on the radar for the next session.
On this election night, here’s where we stand

The S&P 500 is up 21.2% year to date, closing at 5,782.76 on Tuesday. It stands 1.63% from the 52-week high.
The Nasdaq Composite is up 22.8% year to date, ending the day at 18,439.17. The index is 1.84% from the high.
The Dow Jones Industrial Average is up 12% year to date, and closed at 42,221.88. It’s 2.55% from the high.
The Russell 2000 is up 11.5% year to date. The index is 1.7% from the high.

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S&P 500 in 2024

Trump Media & Technology Group

Former President Donald Trump’s social media company reported a loss of $19.2 million dollars in the third quarter.
Trump Media shares were volatile in trading Tuesday and finished down nearly 1.2%. Shares are higher in extended trading on election night, however.

Bonds

Bitcoin

At around 7:10 p.m. on the East Coast, bitcoin is trading at about $69,700.
It is up about 65% so far in 2024.

Here are some key earnings due Wednesday

CVS Health is down 4.3% in the past three months. The latest quarterly numbers come out before the bell. The stock is 33% from the January high.
Toyota Motors is up 3.8% in three months. The stock is 31.5% from the March high.
Honda is up 4.4% in the past three months. The stock is 20% from the March high.
Macerich is a real estate investment trust that owns shopping centers. The stock is up 32% in three months, just off the high hit last week.    
Owens Corning is up 11% in three months. Shares are 4.6% from the 52-week high. 

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Owens Corning in the past three months

In the afternoon

Qualcomm is slated to report. The stock is up 5% over the past three months. Qualcomm is 28% from the June high.
Arm Holdings is up 27% in three months. Shares are 25.5% from the July high. More

In 2024, the median first-time homebuyer was 38 years old, according to the National Association of Realtors’ 2024 Profile of Home Buyers and Sellers report. 
Factors including low inventory, wealthy competitors and high rent costs make it harder to buy a home for the first time, experts say.

Courtneyk | E+ | Getty Images

First-time homebuyers in the U.S. are getting older.
The median first-time homebuyer has reached an all-time high age of 38 years old, three years older than in July 2023, according to the National Association of Realtors’ 2024 Profile of Home Buyers and Sellers report. This summer, the NAR polled 5,390 buyers who purchased a primary residence between July 2023 and June 2024.

In the 1980s, the typical first-time buyer was in their late 20s.
“The first-time homebuyer who can enter into today’s market is older, has a higher income [and] is wealthier,” said Jessica Lautz, deputy chief economist at NAR, pointing out that higher home prices require bigger down payments.
Additionally, the share of first-time homebuyers on the market decreased over the past year from 32% to 24%, the lowest since NAR began collecting data in 1981.
Factors including the nationwide housing shortage, competition against wealthier buyers and high rent prices make it more difficult for younger adults to buy their first home, according to experts.

‘The biggest issue of housing today’

The housing shortage in the U.S. is “the biggest issue of housing today,” said Orphe Divounguy, senior economist at Zillow.

As of mid-2023, there is a housing shortage of four million homes, according to the NAR. Construction of new homes has been slow in recent years, and more buyers are competing for available homes, pushing up prices.
“We do need affordable housing,” said Jonathan Scott, co-host of the HGTV series “Property Brothers.” “It’s going to affect all of us if we don’t start acting now.”
During a recent CNBC Your Money event, Scott said a sustained housing shortage could dramatically influence first-time buyers over the long run. “Give it another 20 years and literally no young person will be able to afford to purchase a home, period,” Scott said.

Building activity has somewhat improved. Single-family housing starts in the U.S., a measure of new homes that began construction, grew to 1,027,000 in September, according to U.S. Census data. That is a 2.7% jump from August.
Yet, “we are still in a very, very constrained market,” said Selma Hepp, chief economist at CoreLogic. “Because of fewer homes on the market, you have more pressure on home prices.”
In August, the cost of a typical starter home was $250,000, up from $240,000 a year prior, according to Redfin.

‘The winners in today’s housing market’

The housing market is dominated by repeat homebuyers and sellers, or those who have owned and sold homes more than once. Prior homeownership gives them access to home equity to tap, in some cases enough to buy homes outright.
About a quarter, or 26%, of homebuyers paid cash for their home, an all-time high for cash buyers, the NAR found.
U.S. homeowners with mortgages have a net homeowner equity of more than $17.6 trillion in the second quarter of 2024, according to CoreLogic. Home equity increased in the second quarter of this year by $1.3 trillion, an 8.0% growth from a year prior.
More from Personal Finance:Buying a home is ‘a way to increase your net worth over time’How the ‘vibecession’ is influencing investors this election yearShould I pay off my mortgage in retirement?
Baby boomers and retirees are “the winners in today’s housing market,” said Lautz. The typical repeat homebuyer is now 61 years old, and sellers are typically 63, per the NAR report.
“When we look at the average homebuyer, for older buyers, they have about $300,000 in home equity versus younger millennial buyers,” Hepp said.

‘We’re seeing renters staying renters for longer’

Other factors such as high rent costs and elevated debt-to-income ratios make it hard for would-be buyers to save for a home, experts say. 
Rent prices increased faster than tenants’ wages during the Covid-19 pandemic. In 2022, rent growth peaked at 16% at an annual basis, Divounguy said. That same year, wage growth peaked at 9.3%, according to data from Indeed.
The price jump meant the typical renter spent about 31% of their income on rent. About half of renter households were “cost burdened,” meaning they spent more than 30% of their income on housing.
“We’re seeing renters staying renters for longer because affordability has been so squeezed,” he said.
High rent prices not only affect your ability to save money to buy a home, but it can also affect your ability to pay down any existing debt, Lautz said.

For instance, if a potential buyer has outstanding student loans, their monthly rent cost could make it harder for them to make larger payments toward their debt balance, she said.
That in turn influences your debt-to-income ratio, or how much money you’re paying every month toward debt. That is an important factor when qualifying for a mortgage. Essentially, lenders consider the DTI to see if a borrower can sustain a mortgage payment on top of existing loan obligations.
“All of these things snowball, especially in an inflationary environment,” Lautz said.

Don’t miss these insights from CNBC PRO More

About 27% of polled shoppers are “doom spending” — spending cash despite concerns about the economy and foreign affairs — according to a new report by Intuit Credit Karma. 
In some ways, the urge was “born out of the pandemic,” said Ted Rossman, a senior industry analyst at Bankrate.com.
Here’s what to do if you plan to “doom spend” anyways.

Mario Tama | Getty Images News | Getty Images

Retail therapy is thinly coating voters’ anxieties from the presidential election — and their wallets know it.
About 27% of polled shoppers say they are “doom spending” — that is, spending cash despite concerns about the economy and foreign affairs — according to a new report by Intuit Credit Karma. The habit is more prevalent among younger generations, with 37% of Gen Zers and 39% of millennials saying they do it.

Follow: Election 2024 live updates: Trump and Harris await Presidential election results

More than half, or 60%, of Americans surveyed are concerned with the state of the world and economy, more than they were a year ago. The site polled 1,001 U.S. adults in late October.
Top worries among doom spenders include the cost of living (55%), inflation (43%), and the presidential election (28%), the report found.

More than a third, 36%, of respondents say they can’t rationalize saving money due to feelings of uncertainty about the world and economy, per Intuit Credit Karma. That jumps to 47% of Gen Z and 43% of millennials.

Shoppers want a ‘sense of control’

Shoppers might be looking for “a sense of control, especially in a time period where it feels like so much is out of your control,” said Courtney Alev, consumer financial advocate at Credit Karma. 
“Doom spending” affects young people the most as they happen to be “chronically online,” or spend a large amount of time on the internet and social media, Alev said.

To that point, 70% of Gen Zers and 52% of millennials consider themselves to be “chronically online,” Credit Karma found.
“If you’re already online reading all about the things happening in the world, it’s more likely that you’re going to really stress out and then look for those coping mechanisms,” Alev said.
More from Personal Finance:How the ‘vibecession’ is influencing investors this election yearPresidential election offers opportunities and risks — for ETF investorsWhat top advisors tell investors about the markets during elections
Shoppers who report making impulse purchases based on social media spent an average $754 over the course of a year, according to a 2023 Bankrate.com survey. 
In some ways, the urge was “born out of the pandemic,” said Ted Rossman, a senior industry analyst at Bankrate.
The trend is especially common among younger shoppers who may feel like “the deck is stacked against them,” he said. 
Young adults’ finances may be dragged down by student loan balances, and they are finding it to be increasingly unaffordable to buy a home, let alone rent their own place, Rossman said.

‘It’s a tough cycle to break’

Doom spending can lead to bigger financial woes. Credit card balances reached $1.14 trillion in the second quarter of 2024, according to the Federal Reserve Bank of New York. 
As of June, 50% of cardholders carry a balance every month on their credit cards, a recent Bankrate survey found. 
“The share who pay in full now is actually the lowest in four years,” Rossman said.
Cardholders are also carrying the debt for longer. About six out of every 10 people who have credit card debt have had it for at least a year, Bankrate found.

“It’s a tough cycle to break,” Rossman said, especially as interest rates remain fairly high for everyday cards.
The average annual percentage rate for credit cards is around 20.50%, down from a record high of 20.79% in August, according to Bankrate.com. The average APR for retail credit cards is 30.45%, a high, Bankrate found.
Election-related doom spending also comes just ahead of the busy holiday shopping season. About 20% of Americans plan to go into credit card debt this holiday season to pay for celebrations and obligations, according to Morning Consult.
Credit card balances can be very sticky. About 28% of 2023 holiday shoppers are still paying off debt they took on last year, NerdWallet found after polling 2,079 adults in September.
“Credit card debt is growing at the fastest rate among Gen Z and millennials,” Alev said. 

Credit card balances are up by 66% for Gen Zers and 52% for millennials since March 2022 when the Fed started to hike interest rates, Alev said, citing Credit Karma member data.
The more debt you put on, the harder it will be to save money, she said. 
“We are seeing these two things come together to really negatively affect the lives of many younger consumers,” Alev said.

‘Take the control back’

“Sometimes when people feel the most anxious is when they just don’t have any control,” said Rossman. “You can take the control back by putting a plan together.” 
If you know there’s going to be a temptation to spend money, make space in your budget to such purchases, Rossman said. 
“Set the money aside ahead of time,” he said, “Just take the impulse out of it.” 
Ideally set the money in a separate high yield savings account so you’re getting a better return, said Rossman. More

Americans ages 50 and over are motivated to vote this election season.
Who they choose for president — Republican candidate Donald Trump or Democratic candidate Kamala Harris — comes down to “day-to-day pocketbook issues,” according to the AARP.

A person arrives to vote at a polling station on Election Day, in The Villages, Florida. 
Miguel J. Rodriguez Carrillo | Afp | Getty Images

In a heated presidential race, there’s one age cohort — voters ages 50 and up — who may help decide the ultimate winner.
“We expect the 50-plus electorate to be the majority of the electorate, and we think at the end of the day they’re going to determine the outcome of the election, particularly in the swing states,” said John Hishta, senior vice president for campaigns at AARP, an interest group focusing on issues related to individuals 50 and up.

About 90% ages 50 and up say they are extremely motivated to vote, AARP has found, versus 75% of voters under age 50.

Follow: Election 2024 live updates: Trump and Harris await Presidential election results

Much of whether individuals in the 50-plus camp choose the Republican candidate, former President Donald Trump, or the Democratic candidate, Vice President Kamala Harris, comes down to who they perceive to be better for their wallets.
“It’s all related to day-to-day pocketbook issues, and who’s better able to handle those issues moving forward,” Hishta said.
Inflation ranks as a top concern, as well as Social Security due to the high cost of living, he said.
Prescription drug prices, which tend to take up a larger share of household budgets as people age, are also top of mind. Caregiving is another area this cohort is paying attention to, since a substantial portion of people ages 50 and over serve in those roles, he said.

Inflation is still top of mind

To be sure, voters ages 50 and up are not the same. Those ages 50 to 64 tend to lean Republican, while those ages 65 and up are now split about 50/50, Hishta said.
As with voters across the board, there is a gender split. Trump has a “fairly substantial lead” among 50-plus men, Hishta said, while women 50 and up lean toward Harris.
Older Republican women ages 50 and over cite immigration and inflation as their top issues, a KFF survey from earlier this year found. For older Democratic women, threats to Democracy tops their list.
More from Personal Finance:How the ‘vibecession’ is influencing investors this electionInflation is cooling, yet many Americans still live paycheck to paycheckWhat top advisors are telling investors to expect this election
Kathy Shanks, 74, of Pinellas County, Florida, cites inflation, immigration and overseas spending of taxpayer dollars as the top issues she’s worried about. She cast her ballot early, voting for Trump for president for the third time.
In 2020, President Joe Biden won Pinellas County, while Trump won Florida overall. Consequently, that county on the western coast, which was recently hit by Hurricane Milton, is one to watch this election.
Though Shanks receives Social Security, she still works as a security guard, saying “there’s no way” she could make it on her monthly retirement benefit checks alone.
Even as the pace of inflation has come down from post pandemic highs, Shanks said her cost of living is still high and her car insurance rates recently increased significantly.

Social Security a ‘very important’ issue

Experts are also keeping a close eye on battleground states where support for the Republican and Democratic candidates is particularly close.
Results in eight states — Arizona, Georgia, Michigan, Nebraska, Nevada, North Carolina, Wisconsin and Pennsylvania — could decide who wins the White House.

Bill Astle of Oro Valley, Arizona, who is 87, said he voted early for Harris.
Astle, who was previously a faculty member at the Colorado School of Mines, a state university, relies on a pension for income. Though he does not receive Social Security retirement benefits, he worries about the future of the program on behalf of everyone else who relies on it for income.
Most Americans say Social Security is “one of the top” or a “very important” issue in how they will vote this election, a CNBC poll found. The program faces looming trust fund depletion dates as soon as 2033, which may require benefit cuts, unless lawmakers act sooner.
Astle lives a little over 60 miles from the Mexican border, and said the talk of higher crime in the area due to immigration is exaggerated. “It’s one of the safest places in the country,” he said.

‘Very much a purple situation’

While both Shanks and Astle have cast their votes, they lament the lack of communication they have with voters who have opposing political views.
“Our social circle seems to have evolved, and some might say devolved, into largely people who think like we do,” Astle said of he and his wife’s social group.
But local news reports show “it is very much a purple situation,” or a blend of blue Democrats and red Republicans, he said.
Likewise, Shanks said she’d like to hear more from Democratic voters on the reasons why they back Harris.
“People who are voting blue, they won’t tell me why,” Shanks said. More

Traders work on the floor of the New York Stock Exchange. 

Stocks @ Night is a daily newsletter delivered after hours, giving you a first look at tomorrow and last look at today. Sign up for free to receive it directly in your inbox.
Here’s what CNBC TV’s producers were watching as stocks slipped in the final session before Election Day, and what’s on the radar for the next session.

China stimulus

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The iShares MSCI China ETF (MCHI) in 2024

Cannabis stocks ahead of ballot initiatives

On Tuesday, four states will vote on whether to legalize cannabis: Florida, Nebraska, North Dakota and South Dakota.
In the last month, the cannabis complex has picked up a solid amount of good vibes from investors.
Canopy Growth is up 24% in a month.
Aurora is up 8.7% in a month.
Scotts Miracle-Gro, which some say benefits from the growth of cannabis, is up nearly 10% in a month.
Trulieve is up nearly 5% in a month.
GrowGeneration is up 6.3% in a month. 

Water

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Energy Recovery in the past three months

DuPont

The chemicals company reports Tuesday before the bell.
The stock is up 3.5% in the past three months.
DuPont is 9% from the late September high.

 Yum Brands

The fast-food company that operates Pizza Hut, KFC and Taco Bell is down 1.8% in the last three months.
Yum Brands is 7.3% from the April high.

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Yum Brands in 2024

Apollo Global Management

The investment firm reports in the morning before the bell.
The stock is up about 35% over the past three months.
Apollo is 5% from the high hit last week.

Super Micro Computer

Super Micro is under a microscope these days. The company was hit with a short seller report earlier this year, and most recently its auditor resigned. Shares fell about 45% last week.
The stock is down 78% from the March high when the price was nearly $123 a share. It ended Monday at $26.03. More

The Federal Energy Regulatory Commission rejected a request to increase the amount of power the Susquehanna nuclear plant can dispatch to an Amazon data center campus.
The agreement is viewed as a first-of-its-kind deal that could serve as a model for other power and tech companies.
Talen Energy, Constellation Energy and Vistra Corp. fell on the news.

A power substation near the LC1 CloudHQ data center in Ashburn, Virginia, on March 27, 2024.
Nathan Howard | Bloomberg | Getty Images

Technology companies’ push to directly power artificial intelligence with nuclear plants hit a major roadblock, after a federal regulator rejected a request to increase power for an Amazon data center.
The Federal Energy Regulatory Commission on Friday rejected a request to increase the amount of power the Susquehanna nuclear plant in Pennsylvania can dispatch to an Amazon data center campus.

Independent power producer Talen Energy in March sold the data center campus to Amazon for $650 million, which would be powered by the nuclear plant in a first-of-its-kind deal.
Talen’s stock closed more than 2% lower Monday in the wake of FERC’s denial order. Constellation Energy and Vistra Corp. tumbled more than 12% and about 3%, respectively, in sympathy as investors Investors expect the companies to announce similar deals at some point. Constellation posted its worst day since the company spun off from Exelon in February 2022.
The grid operator PJM Interconnection and the Susquehanna plant, which Talen owns, had filed a request to increase the amount of power dispatched to the Amazon data center from 300 megawatts currently to 480 megawatts.
The arrangement, called co-location by the power industry, “could have huge ramifications for both grid reliability and consumer costs,” said FERC Commissioner Mark Christie in his opinion backing the order.
Talen said FERC’s decision will have a “chilling effect on economic development in states such as Pennsylvania, Ohio, and New Jersey” in a statement Monday. The power company said it is evaluating its options with a “focus on commercial solutions.”

The Amazon data center campus can still use 300 megawatts of power from the Susquehanna nuclear plant, according to Talen. The company said the deal is “is just and reasonable and in the best interest of consumers.”
The FERC decision does not directly affect Constellation’s plans to restart the Three Mile Island nuclear plant in 2028 through a power purchase agreement with Microsoft. Three Mile Island will dispatch power to the electric grid, rather than directly power Microsoft’s data centers.
But Constellation and Vistra have expressed interest in striking deals with tech companies that are similar to the agreement between Talen and Amazon.
Data centers that power AI and cloud computing are consuming growing amounts of electricity. Utilities are scrambling to find ways to power the growing electric load. Tech companies are increasingly turning to nuclear power because it is reliable, fossil free and does not emit carbon dioxide.
Vistra and Constellation are two of the best-performing stocks in the S&P 500 this year, as investors bet on a potential windfall from the tech sector’s growing energy needs.
Vistra’s stock has more than tripled this year, outpacing even Nvidia to become the best-performing stock in the market. Constellation has more than doubled and is the fourth-best stock in the S&P 500 this year.

Don’t miss these energy insights from CNBC PRO: More

About 67% of polled Gen Zers and 62% of surveyed millennials are using artificial intelligence to help with personal finance tasks, according to a new report by Experian.
Most use generative AI for finances at least once a week, the report found.
While AI can be a useful starting point, there are a few things you need to consider, according to experts.

Karrastock | Moment | Getty Images

People are using artificial intelligence for tasks like writing and editing resumes and cover letters — and even to get personal finance advice. While some of those insights can be valuable, financial advisors caution that AI shouldn’t be your only resource.
A new report by Experian found that 67% of polled Gen Zers and 62% of surveyed millennials are using artificial intelligence to help with their personal finances. Users say that generative AI tools like ChatGPT have helped in areas including saving and budgeting (60%), investment planning (48%) and credit score improvement (48%).

“It’s free. It’s more accessible. It simplifies complex tasks like creating a budget,” said Christina Roman, consumer education and advocacy manager at Experian.
The survey polled 2,011 U.S. adults from August 30 to Sept. 3. The Gen Z respondents were ages 18 to 27 while millennials were ages 28 to 43.
More from Personal Finance:Halloween kicks off a season of home insurance risksHere’s who can ‘easily afford’ holiday costs’Window of low prices is brief’
To compare, about 41% of Gen Xers surveyed, or adults ages 44 to 59, have used or considered using generative AI as a financial tool. The share is smaller for baby boomers surveyed (ages 60 to 78) at 28%. 
According to data Experian provided to CNBC, 98% of Gen Z adults and 98% of millennials had a positive experience with the software.

While using generative AI can help as a first step to drawing up a budget or figuring out how to increase your credit score, always verify the information through external resources, experts say.

“We see misinformation on financial matters all the time,” said Dawn C. Abernathy, a certified financial planner at Core Planning in Chesterfield, Missouri. She also has a background in engineering and software management.
“From working in technology for a number of years and having to solve some very difficult problems … I’m going to vet any answer that comes out of any tool,” Abernathy said.

Pros and cons of using AI for financial advice

Artificial intelligence can be useful or beneficial for “very simple answers,” said Abernathy.
For instance, you can input what your monthly bills roughly come up to and ask the AI to create a budget that helps you save a particular amount of cash, Roman said. 
However, artificial intelligence tools may fall short when it comes to more complicated areas like investment advice and tax optimization. With those topics, AI could offer a starting point, but you’d benefit from a financial advisor to help you navigate specific questions and offer personalized advice, Roman said.
“When it comes to creating a solution for a client,” Abernathy said, “I would not at this point trust an AI tool to really generate the final solution. I would absolutely have to check and vet that very carefully.”

If you do plan to use AI tools, be careful about putting specific personal and financial details into the software. Otherwise, you put your privacy at risk.
“Make sure that you’re being safe with the information that you’re putting into AI,” Roman said.

Vet answers from AI

If you plan to use AI for your finances, make sure to check the answers you get against other verified sources, experts say.
“The risk is leaning too heavily on something that you haven’t researched,” said Brenton Harrison, a CFP and founder of New Money, New Problems in Nashville, Tennessee. 
While the information provided by AI tools can be a great starting point, make sure to follow up with reputable sources and acquire personalized advice from experts like financial advisors and accountants. More

ETF Strategist

Regardless of the outcome of the U.S. presidential election, there could be some clear winners for exchange-traded funds, experts say. 
However, most advisors caution against making hasty changes to your investment portfolio depending on who wins the presidency.

Bloomberg | Bloomberg | Getty Images

Regardless of the outcome of the U.S. presidential election, there could be some clear winners for exchange-traded funds, or ETFs, experts say. 
Whoever becomes president next — former President Donald Trump or Democratic nominee Kamala Harris — will leave their mark on U.S. policy, and that poses challenges to the status quo going forward, particularly when it comes to taxes, regulation and trade.

“They are risks today, but they turn out to be opportunities once we get there,” Kim Wallace, senior managing director and head of Washington policy research at market research firm 22V, said during a webinar hosted by ETF.com in late October.

More from ETF Strategist

Here’s a look at other stories offering insight on ETFs for investors.

The panel also included Anu Ganti, U.S. head of index investment strategy at S&P Dow Jones Indices, and Kristina Hooper, chief global market strategist at Invesco.

Potential winners and losers

In the months ahead, some ETFs or funds could outperform depending on the election outlook. For example, those related to Big Tech and digital coin ecosystems could benefit in the case of a second Trump presidency, while funds focused on residential construction, defense manufacturing and elder care may see a boost if Harris wins in 2024, the experts said.
How the battle for Congress plays out will help narrow the considerations, according to Invesco’s Hooper. “We need to distinguish between what can be accomplished in a divided government versus what can be accomplished in a sweep,” she said.
Exchange-traded funds have steadily gained popularity among investors, with ETF assets crossing the $10 trillion mark in September — a trend experts say is largely due to advantages like lower tax bills and fees relative to mutual funds.

Exchange-traded funds are generally known for passive strategies, but there has also been a surge in actively managed ETFs, with the goal of beating the performance of broader markets.

However, most financial advisors caution against making hasty changes to your investment portfolio based on the outcome of this election.
If history is a guide, there have been times when the results on the sector level were “counterintuitive,” Hooper said.
For example, during the first Trump administration there was support for traditional energy as the country leaned toward ramping up U.S. oil production, but “interestingly, during that period we saw energy stocks underperform,” Hooper said.
Alternatively, under the Biden administration, energy stocks performed better. “Sometimes what we think might happen isn’t actually what happens,” Hooper said.

The element of surprise

Further, in 2016, the S&P 500 rose 4% in November but there was a “whopping 19% spread among sectors,” according to Ganti. “There was a huge element of surprise there,” she said. “None of us really knows what is going to happen in the future.”
“Surprise is always an element of politics and policy,” said 22V’s Wallace, “so too are expectations rooted in what you can see and price now.”

Despite the likelihood of “very significant volatility” in the near term — or at least until the election is certified in January — there are other drivers like the Federal Reserve’s anticipated interest rate cuts that will impact investors more over the longer term, Hooper said.
“Once we get beyond electoral risk in the U.S., both companies and macroeconomic fundamentals will dominate,” Wallace also said.

Buffer ETFs can protect from losses

In the meantime, “investors should be thinking about a variety of different tools to offer diversification and dampen volatility in portfolios,” said Hooper.
In this case, so-called buffer exchange-traded funds could provide some downside protection.
Buffer ETFs, also known as defined-outcome ETFs, use options contracts to offer investors a predefined range of outcomes over a set period. The funds are tied to an underlying index, such as the S&P 500.
But these ETFs also come with higher fees than traditional ETFs and typically need to be held for a year to get the full benefit. More