00:00This is the great map of the United States of America where we are on your Bloomberg terminal easily see Clintons on 2 5 2 . Trump is 126. Our poll yesterday. Gentlemen our poll yesterday put Trump ahead in Florida. No Larry you were surprised. Sorry . You were supply enough Florida. He's ahead in Florida. Larry we surprised the Texas in theory is a swing state. But here we go. Gents Do you believe the polls. Let's put it to you first of all. Richard hi. How do you look at this this risk. Yeah I think for investors clearly it's something that's been a big focus for them right now. I mean I think what I would say is that clearly we saw post breaks I think polls are very dangerous if you like to kind of look at right now. I think what I would say just to investors I think is that you know historically equities have actually proved quite resilient towards election outcomes. So I think that really the focus needs to go back on the fundamentals. You know we've been looking at earnings season so far in the US and the signs that are coming out there right now and I think that's where investors really need to be . Well just when you look up Larry I know you've got a Bloomberg terminal run do you. But would you look at and you see that red headline that comes out that in a swing state Trump is ahead . Does that worry you. Does that unnerve you. Well I'm not so sure about it worrying me it certainly changes a bit the calculus about how you think about what comes through policies would likely to be very very different between the Clinton presidency and a Trump presidency. And therefore I think market impacts could be dramatically different. So from that perspective we would watch it very closely. I did prefer one job that fought for you guys which is that which is this this is a performance of the S & P relative to Clinton's administration . I mean typically typically the S & P rallies in four to six quarters after a US presidential. Clinton two hundred ten percent return. Obama one hundred sixty seven percent return when he came to office in 2009 the Republicans delivers 118 percent under Ronny Reagan. And that was back in nineteen eighty nine. You say we need to get back to two fundamentals . So where are the winners for you. And is it in the US. Does that does that trajectory continue for you in the US. Yeah I think the key for me is I think we need to put things in context of what we see in the market so far. So if you look back over the last few years we've seen a significant rerating if you like in terms of U.S. sectors. I think where we stand right now you really need to see the earnings coming through. And if you take the earnings season example so far I think if you look at the winners in the US banks in our mind have come out of this pretty well. Right. You know if you looked at you know scientific revenues the fixed income commodities and trading side of things that now that's been going quite strongly for them you've seen provisions coming down there as well. So I think the banks as one area we'd certainly call it out as being winners right now . I think on the losers side I think the industrials has been one area where we've certainly seen a bit of weakness. You said a lot of companies if you like reporting profit warnings that and I think that's just a function if you'd like we seen a rebound in commodity prices but you haven't necessarily seen the companies following through in terms of CapEx right. Right now so that's why you're seeing that weakness still if you like in the industrial names that you share that that that that view Larry or do you think I mean a guest in Yes you said look any dips in these markets any sort of shuddering in these markets get in there get in there and begin to build more overweight positions on the on the on the equity side. Yeah. So in the case of a Clinton victory I'll assume that the House remains in Republican hands and therefore we're likely to see a continuation of what we've seen over the last four years which is no major shifts in macro policy at the margin there may be some shifts in the regulatory side farmer health care may suffer a bit on perceptions of increased sort of regulatory activity there around drugs pricing and so forth. But in a Trump victory I think that's where it really begins to change because then you would almost certainly carry the Senate as well as the House in Republican hands. And under that scenario you could really envision a fairly big fiscal expansion. Tax cuts defense spending infrastructure and the big change there for the overall tone of the markets is that the Fed would then have to raise rates at a much faster pace than is currently priced in the forward curve. That's where you really begin to see a big big market swings .

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Investing Through the Noise of a U.S. Election

American's youngest voters are overwhelmingly backing Hillary Clinton for president, as a majority also express fears about the country's future, a nationwide survey released Wednesday by Harvard University’s Institute of Politics shows. The Democratic nominee is backed by 49 percent of likely voters ages 18 to 29, followed by Republican nominee Donald Trump at 21 percent, Libertarian nominee Gary Johnson at 14 percent and Green Party nominee Jill Stein at 5 percent. GAM Group Chief Economist Larry Hatheway and Aviva Investors Global Equity Fund Manager Richard Saldanha discuss their political investment positioning with Manus Cranny on "Bloomberg Daybreak: Europe."