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U.S. Elections 2016

Barings’ investment professionals provide insights on how the U.S. presidential election may impact the fixed income, equities, alternatives and real estate markets.

Real Estate

While the surprise Trump victory creates uncertainty in the markets, we believe the real estate market’s solid fundamentals and underlying strength and transparency will mitigate some of the initial shock. In the near term, Trump’s victory is unlikely to be viewed favorably by markets or by our trading partners and investors overseas. Longer-term, it is unclear how much of Trump’s agenda will actually be implemented. In this sense, we’re facing a scenario not unlike June’s Brexit vote, and as such, we believe the best approach to investing is to let the initial shock subside and focus on the implications of Trump’s cabinet appointment and policy proposals going forward.

In the coming months, we will be paying close attention to Trump’s views on monetary policy, immigration, taxes and foreign policy. Currently, the Fed is telegraphing a very measured approach to rate increases, although Trump has suggested that he may challenge the independence of the Fed going forward, which could impact monetary policy. With regard to immigration and trade, we expect Trump to propose significant reform, though the extent and shape of the reform remain to be seen. At the end of the day, the fundamentals underlying the U.S. real estate market are sound. We believe it would take a very significant exogenous shock to derail the market, and Trump’s win—while certainly a shock—is unlikely to prove enough of a shock to sharply reverse that progress, particularly given the checks and balances in place.

 

Michael Gately

Head of Real Estate Research

Market Insights

High Yield

We anticipate that high yield issuers will largely weather any short-term volatility ...

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Multi Asset

Trump's victory to have a profound effect on global markets ...

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Emerging Markets Debt

We believe the environment remains a healthy one for emerging markets and we continue to see ...

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Multi-Strategy Fixed Income

The U.S. economy remains in reasonably healthy condition and corporate earnings are fairly robust ...

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Private Equity

We don't expect any one political event, such as the U.S. Election or Brexit, to impact our portfolio ...

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Real Estate

At the end of the day, the fundamentals underlying the U.S. real estate market are sound ...

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Global Equities

The investment case for strong companies is not dependent on the president ...

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Infrastructure Debt

Infrastructure spending in the U.S. was one of the issues that both major parties actually agreed upon...

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Structured Credit

Fundamentals are solid & the direct impact of the election are somewhat limited

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Small Cap Equities

Our focus remains on the fundamentals, following a Trump win ...

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Emerging Market Equities

Uncertainty is the big takeaway from Trump's win ...

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Asian Equities

Despite a change of U.S. leadership our outlook for Asia remains strong ...

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