ETF Trends
ETF Trends

U.S. equities and stock exchange traded funds slipped Friday as investors shied away from risk assets ahead of Sunday’s highly contested French national elections.

The S&P 500 Index, along with related funds including the SPDR S&P 500 ETF (NYSEArca: SPY), iShares Core S&P 500 ETF (NYSEArca: IVV) and Vanguard 500 Index (NYSEArca: VOO), were down 0.4% Friday.

U.S. markets weakened ahead of Sunday’s French presidential election as investors worry about the potential fallout if an anti-European Union candidate wins.

“Generally, U.S. stocks look pretty good, but we’ve held off our reallocation process review…in part because of the French election and any disruptions it might cause,” Michael Thompson, managing director at S&P Global Market Intelligence, told the Wall Street Journal.

Centrist Emmanuel Macron is leading most opinion polls and is expected to go head-to-head against a second-round run-off with Marine Le Pen, head of the anti-E.U. and anti-immigration National Front, reports Tanya Agrawal for Reuters.

“Although Macron has been labeled as favorite to become the next French President, an unexpected Marine Le Pen victory could deal a symbolic blow to the unity of the European Union and ultimately create a tidal wave of risk aversion,” FXTM analyst Lukman Otunuga said in a note.

Nevertheless, strong earnings and potential pro-growth policies out of the Trump administration has helped support U.S. markets.

Of the 95 companies in the S&P 500 that have reported earnings through Friday, around 75% beat expectations. Overall S&P 500 company profits are expected to rise 11.2% in the quarter, the best quarterly result since 2011.

Wall Street was also being bolstered after officials said President Donald Trump would sign three documents Friday to push forward his administration’s plans to cut taxes and regulatory burdens. Treasury Secretary Steven Mnuchin said the Trump administration will release a tax plan “very soon.”

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