All Politics Are Local: Long Island Looks at the Pandemic and the Election

Recap of People’s United Advisors Market Update Call: October 21, 2020

A silver globe of the Earth sits on a pile of paper currency from around the world


  • We see challenges and opportunities for the Long Island economy at this difficult time.
  • The COVID infection rate will likely rise locally and nationally in the cold-weather season, but not to the level we endured in the spring.
  • Additional government stimulus will be critical for the Long Island economy, and we think that a compromise will probably be worked out soon in Washington.
  • With Long Island now providing brainpower in multiple service industries, it may emerge as the best of two worlds to live in: It’s close enough to New York City’s knowledge resources but far enough away to offer community-based suburban amenities.
  • The impact of elections on portfolio strategy is hard to predict, as 2016 demonstrated. We don’t make large allocation bets based on political contests.

THIS YEAR WILL GO DOWN as one for the record books. As we approach year-end, what will life look like on the other side of the health crisis and the election? For the nation as a whole, and Long Island in particular, although we’re confronting crises now, we see opportunities emerging. In particular, we’d point to three critical issues that will determine how Long Islanders, and all of us, fare: the course of the pandemic, the governmental policies that we can expect, and the importance of place: where we live and work.

COVID: We’re Likely Past the Worst
Unsurprisingly, the trajectory of the pandemic going forward will be a determinative factor. With the cold-weather season approaching and schools and colleges slowly re-opening, the COVID infection rate is rising, especially among younger people. But we don’t think that the rate will rise to the calamitous level of the dark days this past spring.

We’re mindful that the health crisis is far from over. The national daily death rate of some 700-800 is, of course, unacceptable—but it’s not been increasing despite higher levels of infection: a testimony to more-effective management of the virus. At this point, the numbers for Long Island look good: 100-150 new cases per day, a rate that’s stayed relatively flat, and only eight deaths in the two weeks prior to October 19. And we look for an effective vaccine surfacing in the early part of 2021, with widespread distribution by midyear. In sum, we believe that we’re in the second half of the pandemic’s life cycle.

Long Island Needs Government Stimulus
Our region has been hit hard by the pandemic, because it’s affected service industries, which have become Long Island’s lifeblood, more than manufacturing: People aren’t going to restaurants, but they’re still buying cars. After a rich past manufacturing past, particularly in the defense industry, Long Island’s economy is now dominated by the service sectors: education, health care, restaurants and hospitality, and the like. While Long Island’s current unemployment rate is lower than New York State’s, it’s about two percentage points higher than the national average.

And so additional government stimulus on top of the unprecedented amounts already paid out is critical to the Island’s recovery. At the time of our call, Speaker Pelosi and Treasury Secretary Mnuchin were still trying to hammer out a compromise. A new package may not be available before Election Day, but we’re hopeful that it will come soon.

Real-Estate Boom Coming to the Island?
The pandemic has made all of us rethink how we live our lives and where we work. Especially in the service industries so key to Long Island’s economy, being in the office five days a week—a kind of “factory” model—may be replaced permanently with working more at home. Offices aren’t disappearing—they enable person-to-person communication that remote locations can never match. But offices probably won’t exert the same hold on companies and employees that they used to.

As a result, where workers live will be even more important than it always was. We think we’ll see a boom in suburban real-estate values, much to the benefit of Long Island. In a service economy, dominated by “brains”—intellectual power rather than manual labor—being close to New York City, one of the nation’s most prominent “knowledge clusters,” is a distinct advantage. It’s why Amazon first looked to New York as the location of its second headquarters and ultimately bought the old Lord & Taylor building on Fifth Avenue, hiring 2,000 people to work there. It’s why Facebook leased every square foot of an enormous facility in Midtown. At the same time, Long Island employees are far enough from the City to enjoy the community, education, and recreation benefits of suburban living. That’s a win-win for Long Island.

The Election: Take a Deep Breath
This election season has been remarkable for its rancor. Our advice to clients is to pause and relax. When we looked at all 12-month periods following Presidential elections going back to 1933, we observed that most of the time, the stock market went up—regardless of whether the Democrat or the Republican won. Why? Because the market usually goes up and because investors cheer when uncertainty is resolved. So we expect to see a positive market next year.

But we’re not making big moves in our portfolios based on who is likely to win the White House and which party, if either one, will control Congress. In 2016, Trump won even though all the polls said otherwise, and further, a “Clinton portfolio” assembled for a slower-growth economy went on to soundly beat a “Trump portfolio” of economically-sensitive companies.

Accordingly, our advice is to not over-think the election. Yes, elections have consequences for the economy and overall national policy. But translating those consequences into investment strategy is making a risky bet.

We're here to help!

People’s United Advisors brings uncommon expertise in the form of pragmatic, thoughtful wealth management solutions to individuals, families and organizations. Our experienced professionals work as a team, bringing specialized knowledge and solutions to the conversation.

Fill out the form to have a Wealth Advisor contact you

People's United Advisors official logo


Investment products are offered through People’s United Advisors, Inc., a registered investment advisor. People’s United Advisors, Inc. is a wholly-owned subsidiary of People’s United Bank, N.A.

Investment Products are:

• Not Insured by FDIC or any Federal Government Agency
• Not a Deposit of or Guaranteed by a Bank or any Bank Affiliate
• May Lose Value

Form CRS - ADV Part 2A - Privacy Policy - Legal Disclosure - Wrap Fee Disclosure

© 2021 People's United Bank, N.A.