The populism that appears to have underpinned the UK’s Brexit result is a global phenomenon and one that Donald Trump has successfully exploited, by presenting himself as the anti-politician. But when analysing the US election in terms of its investment implications, the only certainty about the outcome is uncertainty.
Despite Hilary Clinton maintaining a narrow lead in the polls, the lesson of Brexit is that this is by no means a foregone conclusion. From a policy perspective the debate is markedly different from those of recent US elections. In listening and responding to the populists Trump, along with Bernie Sanders before he dropped out of the democratic nomination contest, has shifted the policy landscape to the left. Clinton has responded to the growing populism by publically attacking pricing strategies of drug companies, weighing on the share price of pharm companies.
Volatility leading into the election is to be expected given the uncertain outcome and some of the extreme views being proposed by the two leading candidates. Enforcing any sort of haircut on Treasuries would be negative for the asset class should Trump win. The healthcare service sector could be a key beneficiary of a Clinton victory given her focus on drug pricing. Should Trump win then pharmaceuticals and drug devices would rally. Infrastructure-related stocks, construction and house builders could be beneficiaries of either candidate winning, given the huge financial pledges behind a drive to upgrade the US’s creaking infrastructure.
Suzanne Hutchins – Newton, a BNY Mellon company