Look past U.S. election ‘noise’, focus on medium term

SINGAPORE — With uncertainty looming over the upcoming U.S. elections in November, JPMorgan Asset Management’s Patrik Schowitz says investors should look past the “noise” and focus on the medium term instead.

“On a six month view, you know, we think the cyclical view matters much, much more than … the exact noise and shenanigans around the U.S. election,” Schowitz, global multi-asset strategist at the firm, told CNBC’s “Street Signs Asia” on Wednesday.

“Anything longer than say two or three months, you should be positioned risk-on, you should be overweight risky assets like credit, like equities,” he said.

Still, Schowitz acknowledged that there are “a lot of risks” ahead over the next month or two, with the firm staying more balanced at present. 

“We’ve reduced risk, reduced the size of positioning across our portfolio somewhat but we haven’t really changed the direction,” the strategist said.

“The direction for us is still dominated by the fact that we are through the recession, we are into the next economic cycle — the general direction for markets and economies should be upwards,” he added. “Where a lot of this noise comes in is that it is hard to take a very clear bet in terms of cyclical, defensive, value, growth.”

On Tuesday, U.S. President Donald Trump called off stimulus talks with Democrats until after the Nov. 3 election. 

Commenting on the potential for more U.S. stimulus, Schowitz said: “It’ll be better to get to stimulus now, but as long as we get it early next year we think the economy will be able to get through that,” adding that households that have built a “massive amount of savings.”

“It looks like both sides, whether it’s Biden or it’s Trump are basically intending to give us another round of stimulus,” he said. “Everyone sort of wants to be getting another round through, they just want their own name to be on it.”

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