The 2020 edition of the US presidential election will likely become a major reference point for any tight and contested US election in the future. After a massive ‘blue wave’ had been priced into election day, the thrust broke down and finally trickled into an extremely open marathon of counting votes. In the end, the media called Biden/Harris as the winners of the oval office.
- The ‘blue wave’ turned into a ‘blue trickle’ but nudged Biden/Harris into office. Breaking news on the vaccine front offers new perspectives: focus on the consumer now.
- After so much US, time to look at Asia? Alibaba’s ‘Singles’ Day’ underpins consumer strength. Japanese stocks break out of a multi-year base.
While the incumbent party heavily contests this, the working assumption for investors until January 2021 is to ignore the noise around the juridical clashes. That said, a highly important decision will likely remain open until then: the Senate majority depends on Georgia, where the undecided election will only be repeated in January 2021. So a mini blue wave may still come.
For global investors, this may offer some time to look at other – not to say brighter – spots in the world. Alibaba’s ‘Singles’ Day’ showcases the strength in consumption growth there across the board (see number of the week). This event has dwarfed the Black Friday/Cyber Monday frenzies of recent years in the US. The figures show the massive shift to online consumption as well – as if the global pandemic had not been the final confirmation of the biggest disruption in retail since the introduction of shopping malls.
From a more tactical perspective, cyclicals benefit most from the breaking news of an efficient vaccine today. We would also like to highlight cyclical opportunities in Asia, such as in Japan. Technical analysis highlights the breakout of the Nikkei index from a two-decade long base. This is extremely bullish for the long term and a good time to reconsider the space. On a global level, we have adjusted some of our recommendations in the investment ideas section. Congrats! You made it through the US presidential elections – time to turn to year-end shopping now. ‘Because you’re worth it’.
What is going on in the markets? Julius Baer’s experts share their views.