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On Monday morning, former President Donald Trump said in an interview, “I consider Facebook to be an enemy of the people.”

On Monday, Meta Platforms (META) stock fell 4%.

Meta’s decline outpaced the 0.4% drop seen in the tech-heavy Nasdaq to start the week and served as perhaps the first reminder to investors riding the “Magnificent Seven” trade that election risk matters to them too.

The US presidential election is just eight months away, with a confirmed rematch between Trump and Biden. And when either candidate mentions public companies, investors need to pay attention.

Now, investors have calendars like everyone else. Which means we entered 2024 with “election risks” serving as a talking point for almost all strategists asked to proffer views on where things would be headed in the new year. And they were able to do so with little to fear — elections have been generally good news for US stocks, as Carson Group chief market strategist Ryan Detrick recently outlined.

And the news for the benchmark index is rarely better than when a sitting president is up for reelection — in 10 prior instances since 1952, the S&P 500 has never logged a down year in an election year under a new president, with the average return standing at 12.2%.

The S&P 500 hasn't had a down year when a president is up for reelection. (Source: Carson Group)

The S&P 500 hasn’t had a down year when a president is up for reelection. (Source: Carson Group)

But the S&P 500 always going up during election years that resemble 2024 doesn’t take political risk off the table for every member of the index over the entirety of that year.

Asked during an interview with CNBC for his view on recent efforts in Congress to ban TikTok, a policy Trump pursued as president which he’s since cooled on, Trump said: “… without TikTok, you could make Facebook bigger, and I consider Facebook to be an enemy of the people.”

Trump holding an anti-Meta position is not exactly new for the former president.

Trump was suspended from Facebook and Instagram following the Jan. 6 insurrection and was reinstated last year. In the interim, Trump took up posting on his own social network, Truth Social, which is set to go public via a merger with Digital World Acquisition Corp. (DWAC). DWAC stock fell 2% on Monday, but has more than doubled in 2024.

Meta, for its part, has been one of the most important drivers of the market’s overall return this year.

Data from Yahoo Finance’s Jared Blikre showed that through last Thursday, Meta’s market cap gains — which took the social media giant’s market value north of $1.3 trillion from around $900 billion at the start of 2024 — accounted for 12.3% of the S&P 500’s entire market cap growth this year.

Given Trump’s commentary Monday was both against Facebook and, however timidly, in support of TikTok remaining available in the US, Monday’s reaction in Meta stock brings in two possible challenges for the company in a second Trump administration.

The first is straightforward — all else equal, companies would prefer the sitting or incoming president of the United States not call them an “enemy of the people.”

The second is one wonders to what extent Meta’s rally this year has been underwritten by a potential ban of TikTok that might, as Trump outlined, consolidate the company’s power.

How, if, or why either of these theses — among others, like AI, the metaverse, etc. — should weigh on Meta’s stock on Monday, Tuesday, or any day of the week is why markets remain endlessly fascinating.

Real-time disagreements on what does or does not matter to a given company and how that may or may not impact the value of that company’s future discounted cash flows are, literally, the things that make a market.

And tracking the source of these fissures, from a research note to an executive interview to a former president’s commentary, is why there’s never a boring day in modern financial markets.

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