Sergio Ermotti, UBS Group Chief Executive Officer
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UBS chief Sergio Ermotti told CNBC on Wednesday that no matter who wins the White House leadership, the results of upcoming elections in the world’s major economies will have ripple effects on global markets.
“It’s clear that the outlook for the fourth quarter is still affected in some way by the uncertainties we see on the macroeconomic and geopolitical fronts,” he told CNBC’s Annette. “But of course it’s not going to be a peaceful event.” Weisbach said the move came as the Swiss bank’s third-quarter profit shattered analysts’ expectations.
UBS’s geographic breakdown shows the United States as a key Americas region, which has emerged as important to the bank’s global wealth management performance, with 2.84 billion in the third quarter. Generated revenue of $1 million.
“Regardless of who wins or the outcome, we expect some movement in the market, and it remains to be seen how investors will react,” Ermotti added.
The US has both the world’s largest reserve currency and the largest stock exchange by market capitalization, so markets are braced as voters turn out to vote on November 5th. Already, election uncertainty and expectations for further interest rate cuts from the US Federal Reserve have sent investors fleeing to gold, which hit a new high on Wednesday. Meanwhile, the yield on the 10-year U.S. Treasury note, another safe-haven asset, rose slightly early Wednesday after hitting a three-month high earlier in the week.
“For us, none of these results are positive for growth. [Donald] We see President Trump’s focus on immigration and tariffs increasing inflation. However, we do not expect particularly positive growth outcomes. Arun Say, senior multi-asset strategist at Pictet Asset Management, told CNBC’s “Squawk Box Asia” on Tuesday that this is why bonds are behaving the way they have, saying the market is “For bonds, we have more or less factored in President Trump’s inauguration,” he said. . ”
Democratic candidate and Vice President Kamala Harris is seen as the spiritual successor to current White House leader Joe Biden, whose one-term economic legacy was defined by the Control of Inflation Act and the CHIPS and Science Act. . Meanwhile, Republican candidate and former President Donald Trump’s first-task policy is remembered for rebuilding trade relations with China through a series of tariffs. European leaders expect some degree of protectionism from the United States, whichever side prevails.
trapped tight laceNevertheless, both candidates are likely to implement policies that deepen America’s already expansive policies. $1.8 trillion budget deficitthe International Monetary Fund estimates that it could reach 7.6% of the country’s GDP by the end of the year. Congressional Budget Office prediction The budget deficit could reach $2 trillion in 2024 (equivalent to 7% of this year’s GDP) and $2.8 trillion in 2034.
“Generally speaking, our concern is that public debt and government debt is increasing around the world,” Ermotti said. “So this is not just a US issue. I think we need to accurately analyze the situation as it arrives. And I don’t really expect changes to happen right away, but over time. It will change over time.”
T. Rowe said the Biden administration’s approach to banks has been characterized by “more oversight, more intervention, and pushing for expanded oversight of nonbank financial companies,” so if Harris wins, financial regulation will ” likely to become more proactive and involved. Gilad Fortgang, Associate Analyst at Price It was pointed out in September.
Last year, the Biden administration responded to the mini-banking crisis with the failures of Silicon Valley Bank and Signature Bank. At the time, Biden called on regulators to reinstate safeguards for banks with assets of $100 billion to $250 billion and strengthen oversight of financial institutions.
Asked how UBS is standing up to overcome the post-election uncertainty, Ermotti said: “We will stand by our clients and help them navigate these uncertainties. From a banking perspective, we are in a very strong capital position to navigate any environment. [and a] Our very strong balance sheet position allows us to be closer to our customers. ”
