The polls for now show head-to-head parity between Harris and Trump, with a slight advantage for the current vice president, who shouldered the campaign after the current head of state, Joe Biden, resigned from going for re-election.
The latest market movements suggest that portfolio managers are opting for defensive positions in full mode. “wait and see”. Although according to analysts it is not necessarily due to the proximity of the elections, but rather external factors such as the Asian market and geopolitical tensions have an influence.
Hedge funds are not reducing their stock positions as they historically do before the election and have instead increased their exposure to equities as the S&P 500 index continues to set records, according to Goldman Preferred Brokerage data. Sachs dating back to 2008.
Meanwhile, options traders are more focused on the Federal Reserve’s interest rate cuts and the health of the U.S. economy, placing the Nov. 5 vote lower on the list of immediate priorities, veterans of the market.
“Never bet on a coin toss,” he said. George Ball, director of the investment firm Sanders Morris Harrisbased in Houston, according to the Bloomberg agency. “The elections are too close to allow for thoughtful investment positioning,” he added.
“Concern about the election is roughly fifth behind the war in the Middle East, the explosive movements in China, the tug-of-war in US economic data and changes in easing expectations of the Federal Reserve, the next earnings season, etc.,” he said Chris Murphy, Co-Head of Derivatives Strategy at Susquehanna International Group.
“First of all, it’s a very close presidential race, especially in the swing states,” he said. Eric Sterner, Chief Investment Officer at Apollon Wealth Management. “Second, both candidates have very ambitious economic goals, and I highly doubt that either of them will be able to fully implement these campaign promises unless their party takes the White House, the Senate and the House of Representatives” .
Hedge funds are taking a wait-and-see approach to the election, waiting for more clarity before making significant investment bets related to politics, he said. Jonathan Caplis, CEO of hedge fund research firm PivotalPath. The approach has worked so far this year, with US long-short hedge funds posting an 11% gain through September, putting it in the top quartile of nine-month trailing returns since 2010, according to PivotalPath.
“Most funds are more likely to lean towards continued market growth than radical cuts due to an American election result still uncertainCaplis stated. “It is much easier to discern the impact on investment of a Fed interest rate cut than of a nebulous statement from the Trump or Harris campaigns.”
Analysts advise investors to look at specific stocks and sectors rather than broad indices. For example, there are those who recommend looking at energy, the financial system and the health system. Chinese assets are on the list of operations at risk. Others believe it is better to wait until the choice is made.
“Long-term investors should generally avoid making significant tactical moves before presidential elections, especially when they are very close,” he says. Joseph Caplan, portfolio manager at Caplan Capital Management in Highland ParkNew Jersey. “Although certain sectors may face greater odds of headwinds and tailwinds under different administrations, there are good reasons to avoid wholesale portfolio changes.”
Source: Ambito
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