In the latest US presidential debate between Kamala Harris and Donald Trump, UBS believes that the former outperformed the latter and retained its projection for an eventual win by the Democrats.
On Tuesday night in Philadelphia, US Vice President Kamala Harris and former President Donald Trump faced off in a debate with the Democrat candidate highlighting middle class tax cuts and small business incentives while the Republican candidate focused on criticism against the Biden administration over inflation and border security.
According to a note by UBS Global Wealth Management’s chief investment office, «Harris turned in a stronger performance, especially relative to expectations», citing online prediction market PredictIt’s improved odds of a Democrat victory from 52 percent to 56 percent after the debate.
«We retain our projections for the election outcome, with a 55 percent probability of a Harris win and a 45 percent probability of a second Trump administration,» UBS said.
Manage Volatility
While the bank continues to advise investors against making significant portfolio changes in anticipation of specific election outcomes, it did favor strategies that can manage potential volatility ahead. This includes adding exposure to gold, the Swiss franc and considering structured strategies to retain exposure to potential stock gains while reducing sensitivity to a correction.
UBS also recommended managing any overexposure to areas that are potentially the most sensitive to the election, including stocks in the US consumer discretionary and renewables sectors as well as currencies like the Chinese yuan.
