A traditional pastime during a US presidential election year is trying to predict how the market will react to the re-election of the incumbent or the accession of the challenger. The latest survey to test the waters comes courtesy of Barclays, which polled 354 professional investors with responsibility for $10 trillion in assets under management. The basic premise of the survey was which asset class - bonds or shares - would do better in the aftermath of the result.
Most of those surveyed expect bonds to continue their good performance if President Obama is re-elected, reflecting the traditional view that voting for the incumbent is a basic continuation of the status quo. But that also reflects a fundamental point about the US government's macro economic policy; 32 per cent of those questioned said that a Romney win would probably mean a much tighter macro policy at the Federal Reserve, with interest rates more likely to rise. That might mean a softening of US Treasury bills, with a move of about 10 basis points seen as the likely outcome if Mr Romney wins, according to Barclays' estimates.
Mr Romney's own positioning as a business-friendly candidate means money managers view a short-term rise in US equities as the likely output of his winning the election, but this would most likely be a transitory event, according to those surveyed; an interesting observation, which is not covered by Barclays, is the widespread belief that US healthcare shares, which have benefited from the Obamacare reforms, will fall if a Romney White House decides to repeal the legislation.
What most observers agree on is that whoever is elected on 6 Nov will be confronted with the same set of problems, the most pressing being the so-called fiscal cliff the US faces in 2013. This is when automatic spending cuts and tax rises will kick in, unless a budget deal can be reached against a background of highly polarised political debate. That is why investors worry that whoever wins the election will not be able to break the deadlock.