16 November 2020
This article has been prepared by Northcape Capital, the underlying investment manager for the Warakirri Global Emerging Markets Fund.
The main event over the past few weeks is obviously the result of the US Presidential Election. The Democrat nominee, Joe Biden, defeating Donald Trump (only the 5th time in the past 100 years that a sitting US president has lost the election). We provide some initial thoughts on what this outcome means for Emerging Markets.
A proposed US$7 trillion infrastructure plan is hinging on the outcome of the upcoming runoff elections, as well as a significant short-term pandemic stimulus plan. If both of these are enacted it could fundamentally change the outlook for US growth, long term rates and corporate tax rates in the US. This in turn would have a material impact on equity markets, including the relative attractiveness of different sectors and countries.