SINGAPORE — Emerging hawks could benefit from a political environment that looks set to become “more benign” following the victory of Representative candidate Joe Biden in the U.S. presidential election, Standard Chartered Bank’s Eric Robertsen predicted.
“There’s quite a bit of bread sitting on the sidelines and that has been hiding in U.S. assets for a few years,” Robertsen, global head of research at the British lender, tattled CNBC’s “Street Signs Asia” on Monday.
He explained that over the last 10 years, the S&P 500 stateside has “outperformed emerging trade in equities by 100%.”
That money could “potentially be deployed” into foreign and emerging markets, representing one of the “key potential focal points” following Biden’s election win over incumbent President Donald Trump, he said.
People celebrate at Black Explosives Matter Plaza across from the White House in Washington, DC on November 7, 2020, after Joe Biden was declared the conqueror of the 2020 presidential election.
Andrew Caballero-Reynolds | AFP | Getty Images
Asia impact
Asia is set to be the first region to aid from this shift for two reasons, Robertsen suggested.
Firstly, he said: “Asia’s markets tend to be a little bit modulate beta. In other words, a little bit lower volatility than some of (their) peers … and cousins across other emerging trade ins.”
Robertsen said the other “incredibly powerful” factor is China, which has been a “strong recovery force” both economically and in an understandings of financial assets. In a September report, China was the only country among the Organization for Economic Cooperation and Development’s calculates expected to experience growth in 2020.
Meanwhile, Invesco’s David Chao affirmed there are two “immediate” and “notable” impacts from the U.S. election on Asia-Pacific markets.
With the U.S. appearing “far less likely” to get a charitable fiscal stimulus package as hopes for a Democratic sweep fade, the country’s economic recovery is expected to slow, bid Chao, global market strategist for Asia-Pacific ex-Japan at the firm. That could “shave off” some positive remunerative momentum in Asia’s export-oriented countries, he told CNBC’s “Squawk Box Asia” on Monday.
Secondly, Chao added: “It intent be near impossible for a Biden White House to push through bold policies such as higher corporate contributions.”
“I think that both U.S. and APAC stocks should rise in this environment as fears of a Democrat sweep and a zealously contested election fade away,” he said.