For João Piccioni, CIO of Empiricus Gestão, there are 'no major differences' related to the winner of the election, but some sectors may benefit marginally
No portfolio designed for each scenario. To João PiccioniCIO (Chief Investment Officer) and Empiricus Managementthe result of the American presidential elections will not be a determining factor for the performance of global assets.
“I don’t see many differences between the scenarios in which Donald Trump or Kamala Harris win the elections. Market performance, in my view, is much more linked to economic growth and to American monetary policy”, summarized the manager.
This does not mean that a Republican or Democratic victory is insignificant for the investor. In Piccioni's view, some segments of the economy may benefit more or less from each government, but, in general, the scenario is optimistic for the American market as a whole.
“We are in a favorable decade for innovation. The search for new frontiers, especially in technology, is gaining more and more traction. We will have monetary support from the Fed, with a reduction in interest rates. And either government must stimulate the economy – each in its own way”, he summarizes.
João Piccioni will be one of the forum participants American Elections: the future at stake and will debate the prospects for the dollar, US stocks and other international assets.
The event, promoted by Market Makers and by Your Money, It takes place online between October 15th and 17th and tickets are free. To participate, simply pre-register this link.
To anticipate the ideas that will be brought up at the forum, we spoke with Piccioni about which sectors and assets could benefit from each hypothetical government.
Technology or oil: who wins in each scenario
In Piccioni's opinion, the two possible governments tend to stimulate the American economy: Democrats through increase in expenses and distribution of money; the Republicans for cut in taxes.
While a Democratic victory, therefore, would somewhat represent the maintenance of status quo In the economy, a tax reduction under Trump could brutally stimulate activity.
“Even if it implies a deterioration in fiscal expectations, Trump could benefit companies related to the domestic cycle, which generally pay high taxes… it should boost the oil and gas industry, bringing down prices and weakening the dollar, as the US is an exporter today,” analyze.
Another stimulus foreseen by Piccioni for the Trump administration is the relaxation of financial sector rules, which could benefit regional American banks, major drivers of the local economy.
In the case of the Democrats, the tendency is for the current guidelines to be maintained, without incentives for the oil and gas segment and with a large avenue for technology companies.
“Despite some differences, both adopt a philosophy of 'America First’internalizing investments and prioritizing the race for semiconductors.
Trump or Kamala: who strengthens the dollar?
Although the Democratic stance could bring slightly higher inflation, Piccioni disagrees that this could weaken the American currency.
“In general, Democrats issue a lot of dollars, but they dilute this inflation globally and give purchasing power to Americans. Even with high interest rates, they tend to keep the dollar strong.”
In the case of Trump, the manager's expectations are different. “Republicans accept devaluing the dollar, taking a little more risk to improve competitiveness.” The stimulus to reduce costs in the oil and gas sector is an example of this.
'It seems to me that Trump is better for Brazil': how Republican can stimulate the flow of capital to emerging markets
This possible devaluation of the dollar would be beneficial for emerging countries, including Brazil, in Piccioni's view.
In addition to the exchange rate issue itself, the manager sees Trump as a president who encourages investors to take risks. Furthermore, the change of status quo conducive to technology can prevent the Nasdaq giants from continuing to “suck” capital from global markets.
“It seems to me that Trump is better for emerging markets. Not US rivals like China, but countries like Brazil.”
Internally, Brazilian companies can also gain more or less with each government. Exporters, such as Weg and Embraer, would benefit from a stronger dollar with the Democrats. Companies exposed to the American market, such as Gerdau, would benefit from Trump.
All of this, of course, disregarding Brazil's internal fiscal and monetary risks.
What about Bitcoin? Trump is enthusiastic, but Kamala must give in
An asset class that gains more relevance with each electoral cycle are cryptocurrencies. And it seems that a Trump victory should not only boost Bitcoin, but also elevate the United States to the position of protagonist in the digital assets market.
“Trump will encourage cryptocurrencies, he even talks about having parts of American reserves in Bitcoin. The Democrats are tougher, but Kamala knows she cannot attack an asset class linked to younger voters, in which she has an advantage”, summarizes Piccioni.
Furthermore, he comments on a possible side effect of Trump's victory that could benefit Bitcoin.
“Trump is seen as a figure who brings greater geopolitical risk, which could encourage investors to migrate to alternative assets.”
Who is João Piccioni?
João Luiz Piccioni Junior is fund manager e investment analyst. Engineer and business administrator by training, he has an MBA and a master's degree in finance.
With more than 15 years of experience in the financial market, he has been with the Empiricus group since 2017, where he worked as an analyst specialized in international markets and later head of analysis.
Currently, he is the CIO of Empiricus Management, asset belonging to BTG Pactual and responsible for investment funds of the most diverse categories, as well as pension products and ETFs.
Collect your ticket for the 'American Elections – the future at stake' event
As we have already explained, Piccioni is one of the guests at the event American elections – the future at stake. Promoted by Market Makersone of the main hubs of financial content in the country, and through the portal Your Moneythe event online and free of charge is supported by Empiricus Gestão.
The event will feature three panels between October 15th and 17th and, in addition to the prospects for the dollar and American assets, will talk about geopolitics and the impacts of the election in Brazil. Check out the already confirmed guests:
- Marcos Troyjo (diplomat and former president of BRICS)
- Roberto Dumas Damas (master in Economics and economic scenario consultant)
- Andrew Reider (WHG CIO and global equities expert)
- João Luiz Piccioni Junior (CIO of Empiricus Gestão)
- Lucas Josa (Mynt cryptoasset specialist)
To receive access to the event in your email, simply click on the link below and follow the instructions