The host asked how much the Democratic midterm wave changes the market outlook, in the week after a sharp sell-off in AI and chip stocks. Czerwonko says UBS's baseline already assumed a Democratic sweep and urges investors to focus on fundamentals.
…number and discount to its own history. And as I said before, domestic rates at 14, 15%, they're already reflecting very limited expectations of a cleaning up the house on the fiscal side. So for patient investors, might be worth engaging already. Yet, there's no immediate triggers, to be honest.
…your thoughts on the outcome of the U.S. midterm elections, Alejo? And as we're assessing the results, we've had a much stronger democratic result than many had expected. How much does this blue wave actually change the outlook for markets, generally speaking, and emerging markets in particular?
We've written about this extensively in our Election Watch series of reports. And luckily, our baseline scenario of blue sweep, we managed to nail that down from an analysis perspective, right? Now, a change in control of both chambers will, of course, affect the domestic legislative agenda. It will impact congressional oversights. It brings some additional checks and balance to the current executive administration. But there's a lot then that won't change. And I'm thinking about trade, immigration, foreign policy at large. These are all things that the U.S. President retains authority on. And history shows, you know, presidents on their way out hang tight on what they can control, which typically has to do with foreign affairs. So I think there's going to be a lot more activity here. So in sum, a lot of things will change. A lot of things won't change. For Investors, we've been arguing that this election doesn't matter all that much. Yes, it sends a signal about an evolving political ecosystem in the U.S., but you should ultimately be looking at economic growth, inflation, monetary policy, earnings growth, the AI investment cycle, the geopolitical realities of the…
Quickly, just want to promote the website UBS.com/slash election watch throughout 2026. Alejo, I know you and your colleagues have been populating that website with up-to-date resources on CIOs' midterm election coverage and the investment implications of the outcome, including the many live…
Stay focused on fundamentals. Our view is economic growth remains healthy in the U.S., in Asia, in Latin America, in parts of Europe. This economic growth is being translated into earnings growth by companies worldwide. We're getting confirmation of that in the third quarter earnings season. This…
Well, with that, Alejo, timely insights on today's episode, actionable guidance on the portfolio positioning front. And again, to you, our listeners, I do want to highlight the two publications Alejo has been making reference to on today's episode. They are the Investing in Emerging Markets…