📝Democrat Win Basket Outperforms Post Presidential Debate: UBS Strategy

The S&P 500 is down 1% after core CPI was stronger than expected (+28bp m/m), with the market now pricing a 25bp cut. The election odds markets flipped in favour of Vice President Harris after yesterday's debate (RCP now at 51.8 vs. 46.9). • Election: The Democrat Win basket {UBXXDEMW} is up 1.2% and Renewables {UBXXRNEW} up 2.7%. Trump trades are selling off: Trump Financials {UBXXTFIN} down 2% and Republican Winners {UBXXREPW} down 2.4%. • Tech: AI trade holding up with outperformance from AI Winners {UBXXAIW} up 40bps, and Mag7 {UBXXMAG7} outperforming the S&P ex Tech {UBXXSPXT} by 1.8pp. Semis are fairly strong across the board (AI and non-AI), {UBXXSEMI} up 10bp. • GLP-1 Winners {UBXXGLP1} are down 10bp, down less than the market after Novo reported its new weight-loss drug Amycretin outperformed Lily's Wegovy. Elsewhere, Viking Therapeutics was upgraded away. - UBS Strategy