“This will be a week full of events that can influence the markets because tomorrow the elections are held in the United States, with the candidates very even. Historically, these periods increase volatility in the short term, but once the government is defined, that volatility tends to stabilize quickly. On Thursday, in addition, we will have the Fed meeting on monetary policyand the market anticipates a possible drop in rates. We are also closing the quarterly reporting season, with some companies yet to present results,” he describes in this regard, in dialogue with Scope, María Julieta Prieto, head of Amauta Private Banking.
How to think about investments with an eye on Kamala Harris
In that case, it indicates that “Democrat Kamala Harris’s proposal, on the one hand, has to do with a greater presence of the State and maintain aid to the sectors that need it, which directly impacts consumption because they are assistance aimed at the base of the pyramid.” Likewise, he mentions that Harris points to greater controls for the financial system and for the industrial sector. And, on the energy side, his proposal is on the side of renewable energy.
In this sense, Bano points out that The most interesting ADRs in case the bet is on the Democratic candidate are the Cedears of consumer companiessuch as Wall Mart (WMT), Costco (COST) and Target Corporation (TGT), which “are going to perform well under Harris.” “On the other hand, in the energy field, I think of a company like First Solar (FSLR), which generates solar energy, but from end to end the company uses inputs from the US,” he says.
Regarding the health sector, Bano believes that Harris will have a less favorable policy for pharmaceutical companies because he will opt for regulation of drug prices, but it will be convenient for the development of the health insurance market. Thus, he highlights that, “The proposal of Kamala is one of greater control for pharmaceutical companies, but, on the other hand, it wants to assist those who do not have access to health plans, which will make companies like United Health Group (UNH), health services, can take off.” So that Cedar It would be a good option for the investor who bets on Harris.
If Donald Trump wins, how should you get invested?
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Meanwhile, on Trump’s side, Bano considers Classic oil companies are a good bet, with the Energy Select Sector ETF (XLE), which has a strong emphasis on the oil industry. And, if not, the cedars of ExxonMobil (XOM) either Chebron (CVX)among other oil companies.
On the other hand, it indicates that, “If Donald Trump wins, the most advisable thing in the sector to exit are the pharmaceutical companiesbecause it will make approvals less bureaucratic so that drugs can be marketed.” And, in this case, think about companies like Johnson and Johnson (JNJ), Amgen (AMGN)among other laboratories.
Trump is also betting more that help to the people will come through benefits to businessmen, one could say that he believes in the famous ‘spillover law’. “So you will have a most protectionist economy in the industrybut also believes in lowering the level of regulations and state intervention in private activity. From that point of view, what is expected is that there will be tariff measures to protect local production,” he defines.
Likewise, Bano thinks that Trump’s profile will be very oriented to the financial leg and, in this sense, mentions the cedars of some companies such as JP Morgan (JPM), West Fargo (WFC) and Citi (C), which “will benefit from an eventual victory of the Republican”, or the Financial Select Sector ETF (XLF), invested in the financial sector
National assets: which ones to bet on before the US elections
Sergio Gonzalez, Head of Asset Management at Cohen Aliados Financieros, For its part, it focuses on global assets within the US electoral scenario and points out that, “for those who believe that there will be a Trump victory, sovereign debt instruments in dollars would be the most appropriate because it is believed that “A victory for this candidate would benefit the country.”
It is worth remembering that It is speculated that a Trump presidency could help Argentina unblock international credits that the Government of Javier Milei needs.
Meanwhile, for those who believe that a Harris victory is going to be the electoral outcomeGonzález says that “the most advisable thing is arrive with greater liquidity and dollarized in banknotes or in a very conservative asset, such as a money market fund in dollars.
Neither one nor the other: neutral bets
However, it indicates that we must take into account the enormous fiscal deficit that the US has, which will continue to rise no matter who wins, and the lowering of rates, which will occur whoever is the next president in the US. And, in that sense, for those who do not want to risk it for one or the other, he indicates that “The stocks that will or will benefit are the sectors of the iShares Russell 2000 ETF (IWM), SMEs“.
“This index benefits from lower rates, but on the other hand, because if all production is brought to the national territory, as was said, SMEs will have a boost,” says Bano.
Likewise, given that both candidates are going to support the national industry, he mentions that It is a good option to go for companies like General Electric (GE), Boeing (BA) and Caterpiller (CAT). And finally, the Emerging ETFs, such as EEM or EWZ (which is Brazil), given that it is expected that lower rates will benefit this type of markets due to a trend of increased risk appetite among global investors as US bonds become less attractive.
Liquidity, a valid option
Also in a scenario of indefinition, analyst Daniel Osinaga He thinks, for his part, that it is best to wait and see what happens. “In the face of binary events, we must be mostly liquid. “There’s a reason Warren Buffet has his highest liquidity in his history,” he says.
And he considers that it will be a very even election and with the Standard & Poor’s 500 index (SPX) that does not stop risingso, for him, “it makes no sense to take risks” and that is why he prefers to remain liquid until there is an electoral definition.
The truth is that, as Prieto, from Amauta, states, with his eyes set on next year, “the new government will face important challenges regarding the high level of debt and fiscal deficit in the US”, points that the market and investors will follow. . So, regardless of who wins the elections, The economic scenario will not be easy for investors to navigate and decisions will have to be made as the US activity data gives new signals..
Source: Ambito
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