economic issues influence the 2024 election
“It’s the economy, stupid.”
This phrase, popularized by James Carville during Bill Clinton’s 1992 campaign, holds true even today. In 2024, economic issues were at the forefront of the U.S. election, with 90% of voters identifying financial stability as a crucial element in their voting choices. The election concluded with Donald Trump returning to the White House, primarily because 54% of Americans felt he was best equipped to address inflation and restore economic stability.
Voter concerns regarding economic conditions soared to levels reminiscent of the 2008 Global Financial Crisis. Escalating living costs, enduring inflation, and worries about job security pushed economic matters to the top of the political agenda. Over half of the participants considered the economy an “extremely important” topic, highlighting the heavy burden of financial challenges on households.
For Australian investors, the result of the U.S. election indicates potential turbulence in global markets. Trump’s re-election is predicted to trigger changes in trade policies, corporate taxes, and regulatory environments, all of which could affect Australian companies engaged with the U.S. Markets tied to resources, technology, and financial services—significant sectors for Australian investment—may see variations as markets respond to policy shifts.
Moreover, the renewed emphasis on inflation and economic steadiness in the U.S. could have ramifications for the Reserve Bank of Australia’s monetary policy choices. Should the Federal Reserve take a more assertive approach to interest rates during Trump’s tenure, the RBA might need to adjust its own strategies to uphold currency stability and bolster investor trust.
Amid financial uncertainty driving global sentiment, Australian businesses and investors ought to keep a close watch on U.S. policy changes. The convergence of trade dynamics, inflation, and financial markets will be vital in shaping investment approaches in the coming months.
consumer activism and its market influence
Consumer activism has become a formidable force in influencing corporate conduct, with initiatives like the recent “economic blackout” showcasing consumers’ growing readiness to leverage their purchasing power as a means of protest. Although the short-term impact of the February boycott seemed slight—Amazon even documented a 1% rise in sales—historical patterns indicate that sustained consumer pressure can lead to considerable corporate and market changes.
For Australian enterprises, the rise of consumer-driven activism in the U.S. brings both challenges and prospects. Companies with ties to American markets, especially in retail and consumer goods, need to navigate a more divided environment where political and social matters affect brand image and sales outcomes. The 2023 Bud Light boycott, which saw conservative consumers withdraw support over its collaboration with a transgender influencer, acts as a cautionary example. The backlash resulted in a prolonged sales slump, illustrating that consumer sentiments can have enduring financial effects.
Australian retailers and multinational firms operating domestically should take heed. Although consumer activism has historically been more pronounced in the U.S., analogous trends are emerging in Australia, especially concerning ESG (Environmental, Social, and Governance) factors. Investors are increasingly examining corporate pledges to sustainability, diversity, and ethical supply chains, prompting companies to align their policies with shifting consumer expectations.
For institutional investors, the primary lesson is the likelihood of increased volatility in sectors vulnerable to consumer sentiment. Retail giants like Amazon and Walmart, which both operate in Australia, may need to adapt their strategies to reduce reputational risks. Furthermore, Australian-listed companies with significant revenue from the U.S.—especially in technology, finance, and consumer goods—should evaluate how changing consumer behaviors in the U.S. could affect earnings and market standing.
Beyond retail, the reduction of DEI initiatives in the U.S. might pose wider implications for Australian businesses. As American companies retract diversity programs under political pressures, Australian firms connected to the U.S. may confront inquiries from investors and stakeholders regarding their own commitments to social responsibility. With Australian institutional investors placing a strong emphasis on ESG principles, companies that do not uphold clear and consistent policies may face reputational harm and potential capital withdrawal.
In the future, the interplay of consumer activism, corporate governance, and political influences will remain a crucial factor in market dynamics. Australian investors should vigilantly observe how these movements develop, particularly as additional boycotts and protests are anticipated in the U.S. throughout 2025. The capacity to foresee and adapt to shifts in consumer sentiment will be essential for businesses striving to sustain stability and investor confidence in an ever-changing market landscape.
