Alfred Lam, CFA, Senior Vice-President and Chief Investment Officer
Marchello Holditch, CFA, Vice-President and Portfolio Manager CI Multi-Asset Management
In these tumultuous times when society is fighting both a global pandemic and managing tensions around racial and economic inequality, Americans are heading to the polls to determine their leader for the next four years. While Joe Biden currently leads in the polls, it’s important to remember that polls have been wrong three times in the post war era (1948, 1976 and 2004). As is our process with most “known unknowns,” we look at the various outcomes and how they are likely to affect the economy, capital markets and our portfolios.
The best-case scenario for the markets is to have a clear winner. Stock markets are likely to increase because there is less uncertainty or stay neutral because that outcome is already priced in. A contested election would heighten uncertainty and lead to prolonged volatility. Also, while the president does hold a great deal of power, the outcome of the Senate and House elections are equally important. To help understand these implications, we’ve examined three scenarios of what could happen once a winner is determined.
Read more about the three scenarios by downloading this PDF >>