Uncertainties lie heavily on the markets

8th November 2016

Daniel Pfund, Senior Financial Analyst, Fund Manager

The largest uncertainty, which soon will be removed, is of course the US presidential election. This will impact the whole world, and of course all world markets. Markets would like to keep the status quo and would hence prefer a democratic president. Furthermore the republican candidate frightens with its economic program and is rather oriented anti-globalisation. This uncertainty should be removed after November 8th, unless there is a similar situation to 2000, with a too close a result to be clear, with several legal appeals. This would be the worst scenario for the markets; high volatility would certainly be the result.

In Europe, Italy will vote on its constitutional reform on December 4th. Beyond this purely constitutional matter, the first minister is risking his position. In case of a no, he has announced his resignation. The opposition is therefore appealing to vote against the reform, with the risk that Italy has no government for a certain time.

In any case, markets don’t like uncertainties and we can look forward to have them behind us.