The US elections have the potential to have a significant impact on US equities and rates markets, according to a recent survey by Barclays Research. Investors seem to believe in a more promising growth outlook under a Romney win, in spite of their concerns about a likely tighter monetary policy stance. They favor long equities and short bond portfolios as the best way to express a Romney win. Under an Obama win, investors favor bonds and are divided about the direction of equities, but would choose bonds and equities over FX and commodities to express this scenario. Obama’s victory would likely be perceived as preserving the status quo (asset market moves are expected to be muted across the board), while a Romney win is more likely to suggest a change of direction to clients by way of a better growth outlook. Congressional deadlock remains the biggest economic/policy concern no matter who wins.
Congressional Deadlock remains the largest concern...
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Stocks Flat to Down under Obama; Small to Substantial up under Romney...
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And under Romney, Bonds To Sell-off...
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Charts: Barclays