The results known so far of the US election have shown the world’s most powerful economy deeply divided – and markets uncertain.

Incumbent Donald Trump, with 213 electoral college votes, trails challenger Joe Biden’s 227 (as at 12.30am Nov 4). The winner needs at least 270 votes and results from several states such as Pennsylvania and Michigan are not clear yet.

The much anticipated “Blue Wave” did not manifest. “Whoever wins we know already that Trump did well. Hence, the market has started to change the narrative from a blue wave to a possible Trump victory,” observes Amundi Asset Management.

“Regardless of the final outcome, the national fissure will continue to be deep. After enormous amount of time, energy, and money spent, neither party has a clear mandate to govern,” says DBS’ chief economist Taimur Baig.

Final results won’t be out for at least a day, or two, but Baig is willing to conclude that the Democrats won’t be able to take control of the Senate, and it is likely they will lose some of their margin they’ve enjoyed over the Republicans at the House of Representatives. And, Trump has outperformed the polls considerably, casting doubt on the coverage accuracy of pollsters yet again.

Meanwhile, markets have reacted. The renminbi, for example, was sold off, in anticipation of further trade tensions. “We continue to anticipate elevated market volatility until there is more clarity on the election outcome,” says Mark Haefele, global chief investment officer of UBS Global Wealth Management.

Given how the Congress is likely to be almost evenly-split, potential new stimulus packages, such as the US$1.5 trillion one bandied by the Democrats, will likely be constrained, he says.

Besides making sure that portfolios are well diversified across asset classes and geographies, Haefele believes that investors should consider stocks that are “relatively insulated” from campaign issues such as those in communication services, those with a diverse revenue stream or diversified content; consumer staples; and portions of the IT sector that have remained out of the regulatory spotlight.

“We maintain a positive view on stocks over the medium term, driven by expectations for another round of fiscal stimulus and the widespread availability of a vaccine by the middle of next year,” he adds.

“We believe the recovery from the pandemic will continue to be the main equity market driver over the next several months regardless of the election outcome,” says Haefele.

In the meantime, investors should not get too optimistic. “In the absence of a clear guidepost to the political scene ahead, markets will likely be listless and prone to risk aversion, in our view. China-US friction is unlikely to receive a breather; same goes for Asia. Policy uncertainty and volatility are here to stay,” says DBS’ Baig.