US - The outcome of the US election in three weeks will end some uncertainty and speculation as to the direction of the US economy, but will not be a 'magic bullet', asset managers warn.
"Having the outcome of the US elections settled will offer some measure of assurance, but given the magnitude of the financial problems currently facing the world, any assurance is likely to be relatively slender," he said.
Simon Laing, North America equities fund manager at Newton Investment Management, said: "This is certainly not a typical election build up, given the economic crisis. The economy will be the focus for both candidates in the run up and through 2009.
"Until tangible solutions to stabilise the current flailing economy have been put in place, it is too early to postulate on what aspects will be good or bad for individual sectors."
In terms of international impact, it is thought an Obama victory would have a more positive effect on European markets than McCain, with an 'Obama bounce' predicted.
As a Paris-based consultant who did not want to be named noted, Obama enjoyed significantly higher popularity in Europe than McCain, as his policies were felt to represent change, greater openness to multilateralism and would mark an end to eight years of a deeply unpopular Republican government.
Schaefer agreed: "In Europe, Obama would be likely seen as a change for the better [because] we expect a perception the US will be more willing to consult and work with allies on key global issues.
"However, we anticipate that Europe would read a McCain victory as more of the same in terms of US conduct of foreign policy and dealings with allies."
One of the biggest potential headline risks coming out of the election is the expected re-regulation of the financial services industry and the attendant problems a concentration of power could entail.
Schaefer said: "Financial stocks will be subjected to higher levels of regulation under Obama, but even a McCain administration is likely to propose new levels of regulation in the sector. Observers should be paying close attention to the Congressional elections, as this will have a profound impact on the ability of the new president to enact any programme."
Laing added: "The biggest risk, in our view, is that if the Democrats sweep the presidency and Congress, there is a lot of legislative power in one set of hands going into a period of increasing regulation."
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