Hot takes from industry experts as Americans go to the polls
The bitterness that has characterized this U.S. election showed no sign of abating as the two candidates took part in a final campaign blitz yesterday.
Today is the day when millions of Americans get to choose between four more years of Republican President Trump or replace him with Democrat Joe Biden.
With the global pandemic hammering economies, the two displayed further contempt for each other as their campaigns finally reached the finished line. Trump told rallygoers in Fayetteville, North Carolina, that “a vote for Biden is a vote to hand the keys to government over to people who despise you and people who want to rob your children of their American dream”. For his part, Biden called Trump a “disgrace” who doesn’t understand selfless service or courage.
Stayed tuned to Wealth Professional’s newsletters for key updates over the coming days and maybe more if the outcome is disputed.
As we look to our southern neighbours for a sign of what their political future holds, here’s a selection of hot takes from the wealth industry about what is at stake.
“So many people are asking ‘if Joe Biden wins, will that turn off innovation?’ Quite the contrary. If he were to win, and costs were to go up as taxes go up, then I believe innovation would be even more necessary to continue helping companies cut costs and offset that hit. I'm not worried about innovation in the short term in the U.S., I'm worried about the future of innovation, meaning beyond the next three to five years, because I think that other countries will be more friendly to this kind of capital, and innovation will migrate abroad. We will follow it - we're going to invest wherever we see innovation.”
“[If a Deep Blue Wave] happens, there is an increased probability of even more fiscal stimulus being passed than is currently on the table. And while that would likely push stock prices higher in the near term, it also raises longer-term questions about the market’s growing dependence on government spending and central bank accommodation. At some point, ballooning deficits that are a consequence of unbridled stimulus need to be addressed and may swing sentiment in a less favourable direction.”
“Whether the investor is waiting for the election to be over and has a bit of scar tissue from 2016 in terms of the market not really getting that call right or if they're waiting for the development of a vaccine, it kind of feels like either way, both could be behind us soon. That could be a tailwind for [U.S.] equities.”
“The really big difference is that if you get federal cannabis legalization [via a Democrat win], then you have the ability for capital to come into these companies to allow them to expand and get investment capital. That helps the stock prices for sure but the businesses themselves are likely going to continue to thrive, even if it's not federally legal.”
“Markets don’t like uncertainty - in this case, the uncertainty of how the political landscape may shift on election date, or increased volatility on some to-be-determined date after the election. While keeping our eye on the long term, we are gearing up so our funds can take advantage if volatility does rear its ugly head. Volatility is just like the ugly duckling, short term it’s ugly but in the long term the beauty of strong returns can emerge as an elegant swan.”
“Unless it’s a clear landslide for President Trump or former Vice President Joe Biden, the outcome of the presidential election probably won’t be known for days or even weeks. This is likely to be accompanied by high levels of market volatility, especially as more Democrats are requesting mail-in ballots than Republicans. This could set up a scenario where Election Day results appear to favour Republicans and then mail-in ballots — which take longer to count — shift the outcome toward Democrats. Either way, court challenges are a predictable outcome.”
