The race for the US presidency is gaining attention across the globe. After all, the President of the United States has the power to influence stock markets, trade and politics on an international scale.

Here we give you a roundup of what to expect in the run-up to the election and how this could affect your clients’ investments.
 

3 March – Super Tuesday

Super Tuesday sees 15 states vote for party presidential nominees on the same day. Because these 15 states encompass a wide range of demographics and political persuasions, Super Tuesday gives the first clue of which candidates are likely to go head to head for the presidency. It’s estimated that we could see the US stock market move by up to 1.5% on the day.

13-16 July – Democratic National Convention

The Democratic presidential nominee will be announced at the party’s convention in Wisconsin. Attitudes towards tax, regulation, international trade and public spending vary greatly between the candidates – with some seen as more market-friendly than others – so the global stock markets could react when the winner is revealed.

24-27 August – Republican National Convention

Donald Trump should be announced as the official Republican presidential nominee at the party convention in North Carolina. This continuity, along with Trump’s pro-business policies, is likely to be seen positively by investors. In fact, Trump will likely do everything he can to keep the stock market ticking up before the election – starting with the signing of the US/China trade deal that we saw in January.

29 September – 22 October – Presidential debates

A trio of televised debates in Indiana, Michigan and Tennessee will give the presidential nominees the chance to go head to head on policies and current issues. Trade relations with the likes of Asia and Europe have been high on the political agenda in recent years, so these could receive some airtime. In previous years we have seen spikes in US stock market volatility around these dates, depending on which candidate appears to win the debates.

3 November – The big day

On 3 November the American public will take to the booths to decide who will be sworn into the Oval office. It’s estimated that the US stock market could move by up to 3% when the dust settles, sending ripples across the global markets too. But the direction and magnitude of any movement will depend on who wins and what their policies are like.

A Trump victory is likely to be well-received by the stock markets, as global investors anticipate more of the same after 2019’s stellar returns. On the other hand, many expect a Democrat victory to cause a market downturn – although the same was said about Trump in 2016!

What does it mean for your clients’ investments?

It’s difficult to say how the US election might affect the stock markets as we don’t yet know which names will be on the ballot sheet. Historically the US stock market has performed well in election years, but this isn’t guaranteed in 2020 and there remain unresolved global geopolitical issues. We also expect there to be some volatility along the way, but don’t believe that this should be a concern for long-term investors.

At Architas, we design multi-asset funds with the goal of withstanding political uncertainty, without being overly tied to the fortunes of a particular country or type of investment. We do this by spreading our clients’ money across a diverse mix of high-quality investments from all over the globe.

For more information, call us on 020 7562 4900; Monday to Friday 9.00am – 5.00pm, calls may be recorded.

By Nathan Sweeney, Senior Investment Manager at Architas

 

This is for professional clients only and should not be issued to or relied upon by retail clients.
AMML is an investment company that provides access to other investment managers’ services through a range of multi-manager solutions, including regulated collective investment schemes. AMML in the UK works with strategic partners and AXA Group internal fund managers, to find out more information about this please visit architas.com/inhousestratpartners/ AXA is a worldwide leader in financial protection and wealth management. In the UK, one of the AXA companies is Architas Multi Manager Limited, an investment company that provides access to other investment managers’ services through a range of multi-manager solutions, including regulated collective investment schemes. Architas Multi Manager Limited is a company limited by shares and authorised and regulated by the Financial Conduct Authority (Firm Reference Number 477328). The company is registered in England: No. 06458717. Registered Office: 5 Old Broad Street, London, EC2N 1AD.