The pronounced moves in global equities since the US presidential election are a logical reaction, according to the guests on the latest edition of the FTAdviser podcast.
Mikhail Zverev, head of Global Equities at Aviva Investors, said the likely outcome of Joe Biden becoming president, but the Republican Party retaining control of the Senate meant that any fiscal stimulus designed to boost growth, would be “muted” in nature, compared to what might have happened if the Democrats had also won control of the Senate.
He said these revised expectations were the reason some of the more economically sensitive shares have fallen in value.
Jerry Thomas, head of Global Equities at Sarasin, said some form of economic stimulus would still happen, but may be less focused on areas such a climate change, that were a priority for Biden.
He said, with this in mind, the waker performance of renewable energy investments was “logical.”
Ed Smith, head of asset allocation research at Rathbones, said any stimulus was likely to be positive for stocks, and if the continued uncertainty means that markets sell off by 10 per cent, “that would represent a buying opportunity.”