UBS’s ElectionWatch 2024

The Race, the World, and Investments April 4, 2024

I was delighted to be interviewed last week by UBS’s Chief Investment Officer Americas, Solita Marcelli, about the upcoming US elections. It was a fantastic conversation, and it was a true honor to be joined by former National Security Agency Director Mike Rogers and David Rubenstein, the Co-Founder of the Carlyle Group.

Markets are struggling to price in the impact of the November US elections for a number of reasons. First, the elections are still seven and a half months away. Polls are unfocused and suffering from a population that feels over-polled and weary of the constant campaign cycle in the US.

Additionally, while our house view is it is between a toss-up and leaning Democratic win for control of the House and a likely win for Republicans to control the Senate, we still have primaries to be held and need a clearer sense of candidates and campaign funding. All this will increasingly become clearer in the next two months.

Geopolitical issues often have little impact on presidential elections, but this year may be an anomaly. Progressive Democrats are deeply unhappy with President Biden’s policy toward Israel and the Gaza War. Increasingly, young Democrats seem to be drifting toward the Robert Kennedy, Jr. presidential campaign, which may upend all current thinking about who wins in November.

Add to this a general unhappiness among the electorate over the state of the economy, especially over sticky inflation (note the uptick in inflation numbers today - April 10 - unexpectedly rising 3.5 percent), which may drive voters to think of other candidates and even other political parties.

You can watch the whole interview HERE. I hope you find it informative and useful.