Should the next US president, Republican or Democrat, cause you to deviate from your investment strategy? Swissquote Bank suggests ‘yes’ and that investors should tweak their investments accordingly, even if financial markets have so far been impervious.
The Swiss online bank will share some ideas on the prospects for different sectors in the future under the presidency of both nominees, Hilary Clinton and Donald Trump. The new offering allows its clients, while preparing for gridlock on Tuesday November 8, to invest in a selection of stocks or currencies which are most likely to be affected by a victory from either candidate.
Forays into different scenarios
With both candidates have made commitments that could reshape financial markets, two different portfolios of stocks have been put together that will likely benefit from a Clinton or Trump victory.
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While in many respects Hillary Clinton is perceived as the candidate of the status quo, Swissquote has selected stocks from the renewable energy, defense, and healthcare sectors. By contrast, the broad consensus is that Mr Trump would be a negative for riskier assets, therefore Swissquote has selected stocks from international trade and areas affected by changes in immigration and energy policy.
The company will use a new predictive analytics tool, which was developed in partnership with Ecole polytechnique federale de Lausanne (EPFL), to track public opinion across the web to predict the outcome of the elections in real-time. The new tool uses different artificial intelligence algorithms, such as graph analysis, natural language processing and deep machine learning, to provide a poll based on nationwide online US sentiment.
Meanwhile, given their strong sensitivity to changes in the political outlook, Swissquote has created different US election forex baskets which feature several currency pairs that are increasingly correlated to poll results. These include the Mexican peso, the Canadian dollar, the Chinese yuan and the Japanese yen.
Rosenstreich, Head of Market Strategy at Swissquote, commented: “The candidates have been forced to choose extreme positions to differentiate themselves. This has increased the probability that the outcome of the election will have real effects on financial markets. For the next few weeks, we anticipate that financial markets will become increasingly sensitive to every move the candidates make, which will only increase the effect on global portfolios.”
Marc Borki, CEO of Swissquote, added: “This real-time web opinion poll has the potential to become an important factor for investments decisions, whether for the outcome of a presidential election or any other investment impacted by shifts in public sentiment. By making this unique metric publicly available, Swissquote continues to lead the effort to merge traditional investment strategy with the latest financial technology.”