UBS House View: Investment research under US presidential election

By Chief Investment Office, UBS Global Wealth Management

Voting is still underway in the US election, in a race that coming into polling day was too close to call. Investors should be cautious of extrapolating early vote count leads that could evaporate as more ballots are counted.

What are the market implications?

As markets digest the state-by-state tallies, we anticipate significant cross-asset volatility in the hours ahead. We reiterate our view that investors should be prepared to use any outsized market reactions to build stronger long-term portfolios, focusing on opportunities in equities, China, bonds, and gold. We also think investors should consider diversifying US dollar holdings.

We believe that US equities are attractive and should be supported by benign growth, lower rates, and structural support from AI, regardless of the election result. Investors should be prepared to capitalize on market dips to build long-term positions, particularly in the technology, utilities, and financial sectors.

We see a potential opportunity emerging in China equities: A Harris victory would allow investors to focus on an improving fundamental picture, while any substantial market correction under a Trump victory could present a potential buying opportunity.

In currencies, although the dollar could strengthen in the near term in the event of a Trump victory, we anticipate medium-term dollar depreciation regardless of the victor and suggest that investors consider using periods of strength to diversify dollar exposure toward other G10 currencies.

We believe that gold remains a valuable hedge against geopolitical and economic uncertainties, and we expect further upside in both Trump and Harris scenarios. While a Trump victory might accelerate gold's rise, a Harris victory would likely see a steadier climb.

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