Turim’s Insights

With scenarios that change all the time, the US elections are the hot topic of the moment and was the opening topic of this month’s webinar.

“In October, the market priced a clear victory for Biden with a Democratic Senate. But we see quite tight margins. The deciding states will still take a while to release their results, and President Trump has already begun to question that. Therefore, we see a very high risk of legalization”, explains Nelson Abrahao, the Turim’s chief strategist.

Expectations for the elections, coupled with a new wave of Covid-19 in Europe, were the main factors weighing on markets in October. Highlights was risk aversion, with main stock markets around the world correcting – with the exception of China.

“With the market giving more probability to Biden’s victory, there was a greater flow to emerging markets, which helped the Chinese stock exchange”, assesses Fernando Verboonen, portfolio manager.

“We have a close election that can be contested, which is bad for democracy and for everyone,” says Gustavo Marini, founder and co-CEO of Turim. “But despite the uncertainty in the short term, the US has a strong democracy, with very solid institutions. As an asset manager, we need to think for the long term.”