Countdown to Election Day

Partnervest

In this pivotal election year, billions of voters are heading to the polls globally. While several influential elections have occurred, the US election stands out as the most significant, with potential for material policy changes impacting macroeconomics and investments.

Potential Policy Shifts: 

• Trade Policy: Both parties may increase tariffs, especially against China. Trump proposes a 60% tariff on Chinese imports and 10% on others, potentially reversing 70 years of US trade liberalization. This could lead to higher prices, a negative shock to global growth, and a stronger US dollar. 

• Fiscal Policy: The next administration must decide on the fate of tax cuts set to expire in 2025. Trump proposes various tax cuts and credits, while the Harris campaign aims to extend tax breaks for middle- and lower-income households. The success of either plan hinges on control of Congress. 

Implications: 

• Broad-based import tariffs could increase prices but have limited impact on medium-term inflation. They may lead to lower bond yields and a stronger US dollar. 

• Fiscal policy changes will depend on Congress, with narrow majorities making extreme proposals unlikely to pass. 

Market Focus: 

• Markets are currently focused on Fed policy implications. The Fed’s next rate move in November is uncertain, with expectations split between a 25bps or 50bps cut. The election will become dominant closer to the date unless a significant event occurs. 

Election Outcomes: 

• A Harris victory with a divided Congress is seen as least disruptive, providing modest impact on financial markets. A Trump win, especially with a clean sweep of Congress, would be a surprise, likely leading to a stronger dollar and higher long-term bond yields. 

Partnervest – supporting unions by supporting their members’ investments. 

Partnervest is a specialist provider of investment solutions for Unions, Entitlement Funds, Charities and through your financial advisor at Industry Super Funds. 

In particular we offer 5 multi asset funds: 

• Franklin Multi-Asset Defensive Fund 

• Franklin Multi-Asset Conservative Fund 

• Franklin Multi-Asset Balanced Fund 

• Franklin Multi-Asset Growth Fund 

• Franklin Multi-Asset High Growth Fund 

These funds are adjusted to consider the relative attractiveness of each asset class given the prevailing economic conditions, whilst maintaining risk and return parameters.  

To learn more about how Partnervest can help you build your financial future, contact Serg Premier 1300 734 496 or email [email protected].