Wall Street’s worst nightmare isn’t Trump or Biden. It’s no clear winner at all
Aug 20, 2020 – By Matt Egan, CNN Business
Excerpt of article below:
President Donald Trump has already declared the 2020 election the “most rigged” in American history. His opponent, former Vice President Joe Biden, has warned that Trump might not leave the White House willingly, and Trump hasn’t confirmed he would accept unfavorable election results should he lose.
A protracted dispute over the outcome would be a nightmare for investors, who famously loathe uncertainty. And what’s more uncertain than a contested election that raises questions about the peaceful transfer of power in the world’s largest economy?
“There is a creeping concern,” David Kotok, co-founder and chief investment officer of Cumberland Advisors, told CNN Business. “If it appears too close to call, we’re going to get a market correction as we get closer to the election.
Markets have been largely unfazed by the rise of Biden in the polls.
Stocks rallied this spring and summer even as Biden overtook Trump to become the odds-on favorite in betting markets. That’s despite the fact that Biden’s proposals to raise corporate taxes and promote clean energy could hurt parts of the stock market.
Kotok suggested that is because a Biden administration would bring about a welcome dose of stability compared with the volatility of the Trump era.
“Markets can tolerate a Blue Wave even though taxes will rise and things will change,” said Kotok. “Markets are fed up with chaotic government.”
At this point, few on Wall Street will be shocked if the election results are not known immediately. It is reasonable to assume it will take time, especially in a close election, to count the mail-in ballots.
“A lack of immediate US election results this fall appears unlikely to spook capital markets,” Todd Jablonski, chief investment officer at Principal Global Asset Allocation, told CNN Business in an email.
Full story can be read here: http://www.wicz.com/story/42523038/wall-streets-worst-nightmare-isnt-trump-or-biden-its-no-clear-winner-at-all
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