CNBC Daily Open: Amid focus on elections, don’t take your eyes off markets

CNBC's election liveblog
As results for the U.S. presidential election start trickling in, CNBC is covering updates live. Meanwhile, an NBC News exit poll showed that 34% of respondents said the state of democracy is the most important issue, while 31% pointed to the economy as a major concern.

Markets rally as investors await results
U.S. markets experienced a broad rally on Tuesday. All major indexes added at least 1% as investors await results from the election. Europe's Stoxx 600 index inched up 0.06%, with most sectors trading around the flatline. Hugo Boss shares fell 4.3% after the company reported sale slowdowns in Asia because of lower demand from China.

Stocks mostly indifferent to the president
Election Day in the U.S. is not only about a country picking a president. It's also about choosing a set of policies and ideologies that will affect the global economy. But investors may be surprised to learn that the sitting president doesn't have much of an effect on the stock market, writes CNBC Pro's Bob Pisani.

Crypto's bet on elections
Coinbase was one of the top corporate donors this election cycle. The cryptocurrency exchange company has given more than $75 million to a pro-crypto super political action committee called Fairshake. Crypto companies like Coinbase are hoping for lawmakers favorable to the industry.

[PRO] The president's sway over sectors
The trajectory of the S&P 500 is generally not influenced much by who the U.S. president is, as mentioned above. Individual sectors' movements, however, are more sensitive to the sitting president because their policy often touches on specific parts of the economy. They might also give clues on the result of the election.

For the next couple of hours, the world will be anxiously tracking U.S. elections results to see how red or blue the map turns.

But investors should not take their eyes off markets.

It may be tempting to view market moves as a proxy for the direction that the elections will go. For instance, Tesla popped 3.5% on Tuesday and rose an additional 1.1% during extended trading.

Some may see it as a sign that investors are more confident about a Democratic victory, because the party will likely preserve incentives for electric vehicle companies; others might read it as a vote of confidence for the Republican Party, given CEO Elon Musk's close ties with Donald Trump.

The open interpretation of Tesla's stock suggests that stock movements are mostly just that: a price signal about the desirability of the company, not a political bellwether.

It's far more fruitful to focus on trading opportunities that might arise from this period of change in the White House.

Stocks might see a sell-off after the election, according to Nomura, because of "the substantial accumulation of long positions in U.S. equities by real-money investors and macro hedge funds."

But UBS thinks any outsized market moves caused by election volatility is an opportunity for investors to build up their portfolios. In the long run, "U.S. equities are attractive and should be supported by benign growth, lower rates, and structural support from AI, regardless of the election result," Solita Marcelli, chief investment officer for the Americas at UBS Global, wrote in a Tuesday note.

The optimism around the economy and markets is shared by Ryan Detrick, chief market strategist at Carson Group.

"The reality is whoever is given the keys to the White House, if you will, is going to be taking on a car that's in pretty good shape — an economy that's in pretty darn good shape," Detrick added.

And even though the sitting president may chart the direction of markets, it's the economy, fundamentally, that will drive stocks.

— CNBC's Fred Imbert, Pia Singh, Jesse Pound and Samantha Subin contributed to this report.