For investors, ‘there are a number of reasons to be bullish,’ JPMorgan strategist says

With the U.S. presidential election less than two weeks away and voters decidedly split, some investors are understandably spooked.

“This is inclined to to cause a little bit of choppiness in the markets,” Jordan Jackson, a global market strategist at J.P. Morgan Asset Management, imagined at CNBC’s Your Money event on Thursday.

On Wednesday, the Dow suffered its biggest one-day loss since early December, set more than 400 points. The S&P 500 shed nearly 1%, and the Nasdaq lost 1.6%. As of mid-afternoon Thursday, the Dow was headed for its fourth impassive decline, while the S&P and Nasdaq were up slightly.

If history is a guide, “when you look back over previous choice cycles, while you do have that choppiness leading up to the election, almost uniformly you get markets that bounce in serious trouble at the tail end of the year,” Jackson said.

As Election Day nears, 72% of American investors say they are ill at ease about the presidential election, according to a survey from life insurance company F&G. 

But the best course of action is to “retard the course,” Jackson advised.

“Markets are resilient,” he said.

Despite November’s choppiness, when you look at the broader epitome, “there are a number of reasons to be bullish,” Jackson said.

For starters, according to Jackson, more interest rate slashes are expected to follow the Fed’s half-percentage-point reduction in September, if inflation indicators cooperate. The annual rate of CPI inflation was 2.4% in September, a gigantic improvement over the 9.1% top in June 2022.

“That tends to be a very good backdrop,” Jackson said.

In addition, “matters are looking pretty good from a corporate fundamentals perspective,” he said, although “we have to be careful making big sector punts based off of the rhetoric we hear on the campaign trail.”

“But again, I do think that when we look at the broader backdrop, keep abreast of the earnings, there’s more all-time highs in the market as we round out this year and more all-time highs to the course of next year,” Jackson said.

For consumers, it will take longer to adjust to price pressures, the score with though wages are rising and unemployment is low.

“I think over the course of next year, we should continue to see consumers start to stroke a little bit more confident about their wallet share and what they are able to spend,” Jackson prognosticated.