Investment Outlook & Implications of a Biden Presidency

U.S. Election Results, a COVID-19 Vaccine, and the Market Reaction

The harrowing electoral process that governs the selection of the President of the United States is essentially over. Several days ago, news outlets proclaimed victory for President-elect Joe Biden and Vice President-elect Kamala Harris. Though timely concession announcements have been the norm by the opposing party candidate since the late 1890s, current President Donald Trump has yet to announce his concession in this race, instead alleging multiple counts of voter fraud committed by the Democratic Party in key states. 

But on the bright side for Republicans, this election did not bring about a sweeping 'blue wave' of Democratic wins, and a divided congress may wind up thwarting some of the more significant legislative objectives that were once proclaimed. Still, there is much for markets (and for investors) to digest here, including the announcement of Pfizer's new COVID-19 vaccine. With that being said, we present some of the top post-election outlooks from leading asset managers, covering the potential ramifications for emerging markets, Green New Deal policies, inflation, and financial assets.
 

GLOBAL INVESTMENT OUTLOOKS

A New Inflation and Active Management Playbook (Wellington Management, Oct 2020)

Wellington Management's Multi-Asset Strategist revisits the scenarios laid out last quarter on the potential path of the pandemic, setting the stage for a deeper discussion on medium to long-term inflation expectation, and the challenges currently confronting active asset managers.

Emerging Markets Prepare For Post-Globalization (Janus Henderson, Oct 2020)

Regardless of the US election result, deglobalization will be the challenging force for export-focused emerging market countries to overcome. However, Janus Henderson portfolio manager Daniel Graña describes how value-added services and reformist policies could fuel the next wave of growth and positive returns for these markets.

Friend, Foe or Frenemy? What Biden’s Win Means for EM (NN IP, Nov 2020)

NN IP considers the impact of a Biden victory upon emerging markets, specifically zeroing in on US-China trade tensions and the likelihood of strengthening America's relationship with India, Vietnam, and Mexico.

Should My Portfolio Deglobalize? (Northern Trust AM, Oct 2020)

In times like these, Northern Trust stresses the benefits of diversification and the importance of allocating assets in a balanced fashion across a variety of global asset classes.

Investment Traffic Lights (DWS, Nov 2020)

In this edition of their latest quarterly investment outlook report, DWS reviews the market's performance during the month of October as well as the implications of the recent U.S. Presidential election.

Uncommon Truths: Is gridlock good for stocks (Invesco, Nov 2020)

For compliance reasons, this paper is only accessible in certain geographies

Invesco analysts expect lower geopolitical risk during a Biden U.S. Presidency, renewed climate initiatives (such as rejoining the Paris Agreement), less tariffs, and increased fiscal spending. They discuss these and other potential implications.

COVID-19 VACCINE: THE MARKET REACTION

Pfizer Vaccine: Watch for the Fallout From This Extreme Rotation (John Authers)

John Authers discusses the significance of the rotation in equity markets after the announcement of Pfizer's COVID-19 vaccine.

Vaccine News Boosting Markets (Federated Hermes, Nov 2020)

This brief update from Federated Hermes talks about the announcement of a COVID-19 vaccine with 90% efficacy. As expected, markets have reacted extremely positively to the news.

Pfizer Vaccine Announcement Puts Momentum in the ICU (Qontigo, Nov 2020)

Qontigo discusses the reaction of factor styles to the announcement of Pfizer's new COVID-19 vaccine. Momentum has been significantly impacted by the news.

US ELECTION UPDATE

What a Biden Victory Would Mean for Investors (Nuveen, Nov 2020)

Nuveen provides a brief overview of their post-election multi-asset outlook, as well as some thoughts on monetary policy, ESG issues, taxation, and fiscal relief packages.

2020 US Election: First take (Janus Henderson, Nov 2020)

For compliance reasons, this paper is only accessible in certain geographies

Janus Henderson stresses that fundamental aspects of the U.S. economy, such as earnings growth and interest rates, should be greater drivers of stock and bond prices than election results.

A Win for ESG (Federated Hermes, Nov 2020)

Mary Green of Federated Hermes examines the basic tenets of the Democrats' Green New Deal legislation which will be high on the agenda for a Biden administration.

Blue Wave Fails to Reach Shore (MFS, Nov 2020)

The purported 'blue wave' has failed to materialize for U.S. Democrats. This will likely mean a more constrained set of outcomes for a Biden Presidency.

US Election: Rage, rage against the dying of the light (LGIM, Nov 2020)

For compliance reasons, this paper is NOT accessible in the United States and Canada

Despite Trump's potential adoption of a Dylan Thomas-esque strategy, LGIM analysts discuss the likely policy implications of a Biden win and a divided U.S. congress.