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Uncertainties surrounding US elections remain high

The US presidential elections in 2020 have not yet produced a clear winner. Counting is still in progress. In some "swing states" a very close result is emerging. This increases the risk that the outcome of the election will be challenged in court. US President Donald Trump explicitly mentioned this possibility on election night. The outcome of the elections for the US Senate is also still unclear.

Uncertainty is great as to what will happen next. Who will get the last votes? When can a result be expected? Is Donald Trump putting his announcements into action? How will the supporters of the two candidates react to the election?

The timing of this tense election could not have been more unfortunate. The divisions in American society have recently become even more pronounced. Even before these elections, the current year in the USA was marked by social unrest. And this against the background that in the USA, as in many other countries, the corona pandemic has led to a health and economic crisis whose end is not yet in sight. Monetary policy will pull out all the stops even if there are further setbacks, but in the end it will only be able to counter political tensions or social unrest to a limited extent.

The possibility of a turbulent election autumn prompted us in September to take a tactical underweight in US equities in the portfolios we manage. We were prepared to leave some potential in this equity market in order to be less exposed to downside risks. With today's developments, we are maintaining this orientation for the time being. Overall, we continue to advise caution in the portfolios, but still see opportunities in Chinese equities or Swiss real estate investments.

The situation in the USA will develop rapidly in the coming hours and days. We are closely monitoring these developments and their impact on the financial markets and will make adjustments to the portfolios as necessary.

PostFinance Ltd
Investment Research & Advisory
Mingerstrasse 20
3030 Bern
0848 888 700 (max. CHF 0.08/min. in Switzerland)