A Democratic ‘clean sweep’ would open up a range of potential changes in the US economic orthodoxy. It appears likely there will be more efforts to tackle inequality.
That may be negative for equity investors, but it also seems more likely that significant new spending could include investment in climate change infrastructure, as well as healthcare. Such programmes could benefit the economy.
Central bank and government stimulus since March has been effective and summer has helped. These tailwinds have now faded and, until a vaccine is approved and distributed, headwinds may accumulate.
We are positioning for a range of possible outcomes, mindful of the risk that the bridge may not support everyone, everywhere, before we clamber to the other side.
Gerry Fowler is investment director, absolute return, at Aberdeen Standard Investments
