Log in Open account
International
CFDs and forex (FX) are complex instruments and come with a high risk of losing money rapidly due to leverage. 62% of retail investor accounts lose money when trading CFDs with this provider. 
Show more
CFDs and forex (FX) are complex instruments and come with a high risk of losing money rapidly due to leverage. 62% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs, FX, or any of our other products work and whether you can afford to take the high risk of losing your money.
Show less

Macro Digest: US election - T minus 8 days

Macro
Picture of Steen Jakobsen
Steen Jakobsen

Chief Investment Officer

Summary:  We see a closer than expected race for the US presidential election which take place next week. Here we provide our long-term analysis, together with the recent headlines.

Our long term analysis: Close to zero impact next four years from who becomes President. Both Biden and Trump have zero willingness or ability to “heal” the US. The 2022 midterm election is already key. The Democratic young-and-left rising fast as voice, while MAGA movement remains in some form after a Trump loss. Either way, it all adds up to more social unrest. I see Biden as a Carter-like President. Full of good intentions after the disaster of President Nixon’s Watergate and the first oil crisis. But external factors (US losing 5G – AI race) will leave US in open discussion on finding its true values and roots.

Headlines Monday October 26th

  • Clean-sweep odds have slipped to 50-50 now.
  • High level of mail votes could see Trump lead on the night, then lose as mail votes comes in – biggest risk if he moves the declare fraudulence.
  • “US Stimulus deal” remains elusive – seems it’s all part of partisan politics at election time – neither side wants to give the other side a win, but has to be seen as trying to act.
  • SAP results indicate “earnings recession” in big Europe…
  • 8 days to election night – this is going to be massive week in politics, more than in economics…
  • Big week for major tech.
  • US voters are angry, v. angry (link).
  • The seven political state of Wisconsin (link).
  • Ms Clinton sees clear victory – hmm she has not won a single election except the US Senate seat in New York given to her… (link).
  • China Communist Party plenum kick off in Beijing. This is the event this week. China impulse on credit + growth is 30-40% (right now China only G-10 with tight monetary conditions). Look for: shift from low-cost manufacturing to semiconductors, renewable energy, medicine and space. The key though is the de facto inclusion of President Xi’s: Dual-circulation strategy which is really short for – We don’t want to be dependent on anybody but ourselves.

Trading

We are going into the election with this portfolio (not advisory – only a model-based allocation)

  • Equity: 35%
  • Fixed Income: 27%
  • Commodity 10%
  • Inflation 10%
  • Volatility 3%
  • Gold 10 %
  • Crypto 5%

We believe in hedging overall risk. We are long risk through equities, hedged with volatility, inflation and commodities. We have added crypto as per below.

26_SJN_01
Source: Bloomberg and Saxo Group.

The real digital revolution... A true hedge on any new US President?  We think so...

  • Buy BITCOIN_XBTE @ 527.00
  • Stop @ 390.00

This is portfolio allocation of 5% into long-term 100Y portfolio

26_SJN_02
BITCOIN_XBTE:xome price chart. Source: Saxo Group
  • Millennials hold higher share of crypto than average portfolios
  • Future “solutions” on tax, capital controls, less monopoly is based on digital solutions
  • Increased anti-establishment is rising now most prolific with Youth divided.
  • We think the biggest “social deficit” is that of the Youth. Denied access to credit(housing) will lead to disintermediation from non-traditional sources.

We recommend 5% exposure to crypto through ETN is our base 100Y portfolio supported by recent break out to upside in pricing.

Quarterly Outlook

01 /

  • Macro Outlook: The US rate cut cycle has begun

    Quarterly Outlook

    Macro Outlook: The US rate cut cycle has begun

    Peter Garnry

    Chief Investment Strategist

    The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c...
    Read full article
  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

    Read full article
  • Equity Outlook: Will lower rates lift all boats in equities?

    Quarterly Outlook

    Equity Outlook: Will lower rates lift all boats in equities?

    Peter Garnry

    Chief Investment Strategist

    After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto...
    Read full article
  • FX Outlook: USD in limbo amid political and policy jitters

    Quarterly Outlook

    FX Outlook: USD in limbo amid political and policy jitters

    Charu Chanana

    Chief Investment Strategist

    As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ...
    Read full article
  • Commodity Outlook: Gold and silver continue to shine bright

    Quarterly Outlook

    Commodity Outlook: Gold and silver continue to shine bright

    Ole Hansen

    Head of Commodity Strategy

    Read full article
  • FX: Risk-on currencies to surge against havens

    Quarterly Outlook

    FX: Risk-on currencies to surge against havens

    Charu Chanana

    Chief Investment Strategist

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperfo...
    Read full article
  • Equities: Are we blowing bubbles again

    Quarterly Outlook

    Equities: Are we blowing bubbles again

    Peter Garnry

    Chief Investment Strategist

    Explore key trends and opportunities in European equities and electrification theme as market dynami...
    Read full article
  • Macro: Sandcastle economics

    Quarterly Outlook

    Macro: Sandcastle economics

    Peter Garnry

    Chief Investment Strategist

    Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p...
    Read full article
  • Bonds: What to do until inflation stabilises

    Quarterly Outlook

    Bonds: What to do until inflation stabilises

    Althea Spinozzi

    Head of Fixed Income Strategy

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ...
    Read full article
  • Commodities: Energy and grains in focus as metals pause

    Quarterly Outlook

    Commodities: Energy and grains in focus as metals pause

    Ole Hansen

    Head of Commodity Strategy

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities i...
    Read full article

Disclaimer

 The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)

Saxo Bank A/S (Headquarters)
Philip Heymans Alle 15
2900
Hellerup
Denmark

Contact Saxo

Select region

International
International
Products & pricing
Platforms
Accounts & service
General
Other
Legal

Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

This website can be accessed worldwide however the information on the website is related to Saxo Bank A/S and is not specific to any entity of Saxo Bank Group. All clients will directly engage with Saxo Bank A/S and all client agreements will be entered into with Saxo Bank A/S and thus governed by Danish Law.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.