Business leaders are cautious

Business leaders and other corporate insiders aren’t as optimistic as others who are contributing to strong market returns for 2024. Also, according to InsiderSentiment.com, their index continues to track below the long-term average. So, this post examines other possible contributors to lower optimism among business leaders, like Warren Buffett, Jamie Dimon, and Jeff Bezos.

business leaders have low sentiment
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The fourth year of a presidential cycle

As we’ve written about previously, the four years of a presidential cycle can have very different market returns. So here, we’ve updated the table below from this previous article, and included the upper and lower 95% confidence limits.

Presidential YearAverage Return (%)95% Lower Limit (%)95% Upper Limit (%)
16.7-2.115.6
23.3-4.911.5
314.06.621.5
46.70.612.9
Average Returns of the S&P 500 from 1928 to 2024. Data Source: www.macrotrends.net

So far, with the S&P 500 up about 21% this year, we are well above the upper limit for the 4th year of the Biden administration. Consequently, this statistical analysis suggests markets may trend back to their long-term mean.

Other factors at play for investors and business leaders

Of course, there have been other factors influencing investors recently. For instance, the Federal Reserve recently reduced short-term interest rates by 0.5%. Also, the monthly jobs report was stronger than expected. Lastly, seasonal hiring appears to be picking up ahead of a potentially strong demand this holiday season. Whether these factors hold until the end of the year is uncertain. And, many expect the presidential election result may also impact future market performance, along with whether the port workers strike again in the early part of 2025. Thus, only time will tell how the market responds to these factors of uncertainty.

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