Quick response: US Presidential Election 2020

In an election in which some felt American democracy was at stake, a delayed result was always possible, and the outcome that markets had feared most in the build-up to polling day.

In the swing states that tend to decide the election, the race between Joe Biden and President Trump is on a knife-edge.

Trump’s victories in Florida and Ohio give him a fair shot at winning a second term in the White House - while Biden’s victory in Arizona strengthens his chances of winning the electoral college.

However, it’s currently too early to declare a winner – and it may be a few days until we have clarity. Several states are still counting their votes, and some are yet to start counting the postal ballots that could decide the election.

Markets hate nothing more than uncertainty, and the absence of a clear winner is likely to heighten volatility as investors try to make sense of what this means for the US – and how long it may be before the next president of the United States is declared.

“The US election always brings with it a bout of stock market volatility," commented Tom Beal, Chief Investment Officer at St. James’s Place. “While the uncertainty of this year’s result is undesirable for investors, a winner will eventually be declared. In the short-term there may be some turbulence, but medium-term stock markets are likely to be more concerned with the economic impact of COVID-19 than the outcome of the election.”

“It is important that, as long-term investors, we do not overreact to short-term market movements, as they are likely to be just that: short-term. If you had the right asset allocation to meet your financial objectives last week, then it is likely to be the right asset allocation today. The scale and speed of the Spring sell-off and subsequent recovery offer a stark lesson in trying to time these events too prescriptively.”

We will provide further updates on the election as the situation develops.

The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested. An investment in equities does not provide the security of capital associated with a deposit account with a bank or building society.