Cormac Weldon, Head of US Equities at Threadneedle Investments, comments on the outcome of the US elections:

“President Obama has emerged victorious from one of the most polarised presidential campaigns of recent years. But despite the electoral rhetoric, Obama knows that his scope for manoeuvre in the face of the ‘fiscal cliff’ and the budget deficit is limited.  He has little choice but to address these challenges (as would a President Romney) by raising taxes and cutting spending. While markets may be volatile post-election, we believe that over the longer term, US equities will gain support from the fundamental strengths of the economy. America is benefiting from a revival in the housing market and an industrial renaissance based on relatively cheap energy supplies. Moreover, capex could pick up sharply (from the very low current levels) once the policy outlook becomes clearer post the election. In addition, the stock market should benefit from the knowledge that monetary policy will now remain unchanged. Mitt Romney had pledged to remove Ben Bernanke as chairman of the Federal Reserve and was opposed to Quantitative Easing, which has proven supportive of both equities and the housing market.”

NOTE: This is written in a personal capacity and reflects the view of the author. It does not necessarily reflect the view of LWM Consultants. The post has been checked and approved to ensure that it is both accurate and not misleading. However, this is a blog and the reader should accept that by its very nature many of the points are subjective and opinions of the author. This is not a recommendation to buy any product or service including any share or fund mentioned. Individuals wishing to buy any product or service as a result of this blog must seek advice or carry out their own research before making any decision, the author will not be held liable for decisions made as a result of this blog (particularly where no advice has been sought). Investors should also note that past performance is not a guide to future performance and investments can fall as well as rise.