A win by former Vice President Joseph Biden on Nov. 3 will bring both opportunities and challenges to the markets, according to two leaders at Columbia Threadneedle.

If the former vice president defeats President Donald Trump, investing opportunities will open up in some sectors, such as infrastructure, Melda Mergen, the asset manager'sdeputy global head of equities, said during a webinar Tuesday.

On the other hand, a Biden win might have a negative impact on consumer spending if there are tax increases, added David Goodman, senior analyst of equity research.

The two discussed what Columbia Threadneedle thinks might happen to the market and the economy if Biden wins the presidential election. The firm was not making a prediction but merely analyzing the impact of a Biden win, they said.

Market volatility will be high around the election, possibly higher than at any other time in the past two decades other than the 2008-2009 financial crisis, Goodman said, and different sectors will have different reactions.

“A second Trump term could see a continuation or acceleration of existing policies, including further limits on immigration and trade, tax cuts and deregulation, and an infrastructure initiative. Under Biden, the sector winners and losers are likely to change. In either case, the degree of change will be dictated by the party composition of the House and Senate,” Columbia Threadneedle said in a statement.

However the firm said Biden’s proposals for spending and tax changes are principal drivers for a positive change in the utilities sector. Infrastructure spending plans are likely to focus on renewables and electrification initiatives. If there is an increased corporate tax rate, regulated utilities would be able to pass this on to customers, added Goodman.

The materials sector would get a boost from a more favorable international trade policy, he said, while the financial sector and traditional energy sources would be challenged. In addition, the communications sector, like the technology sector, while accelerating in use, might be negatively affected by increased oversight and regulation. Anti-trust enforcement and data regulation could weigh on the stocks, the firm said.

“There are many moving parts,” so analysis of each sector is required, Mergen said. “Any outcome from the election also depends on who wins Congress.”

Mergen explained the firm was not surprised to see a quick move toward recovery after the sharp spring downturn because of the fast and large economic stimulus package that was enacted. “Now we see a need for another round of stimulus for some sectors such as entertainment and consumer services,” she said.

International investments could change, particularly with a lessening of trade tensions with China and other exporting companies, but Mergen said Columbia Threadneedle still is advising clients, as long term investors, to remain invested in all geographic markets.

If investors want some kind of prediction for a winner, they might look to Florida, Ohio and North Carolina on Election Day. Those states can start counting mail-in ballots ahead of time and release the results on Election Day, so they will ahead of all other states that cannot open ballots until Nov. 3, Goodman said.

Investors anticipating capital gains may feel pressure to sell assets prior to the end of the year if Biden wins, as capital gains taxes are likely to increase in the future, Goodman said.

Any reaction to the election will be tempered by advances for a coronavirus vaccine. If one is developed in a timely manner, it would “create the opportunity for the economy to recover in 2021.” Mergen said.