Nomination Speculation: Markets Shed Risk as SCOTUS Vacancy, Election Loom


 

Although some publications attributed the September 21 market selloff to a resurgence of COVID in Europe, we personally think that the culprit lies primarily in the U.S. Justice Ginsburg's death is already causing tension between the parties, but it is largely viewed as more galvanizing for the Democrats, regardless of whether or not the vacancy is filled immediately. Moreover, former Vice President Biden leads in most national and swing state polls, and several pundits have viewed a Biden win as potentially negative for stocks in the short term.

 
 

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We're skeptical of that sentiment, frankly, as most economic data shows markets are likely to struggle no matter who wins. But if there's one thing that election year markets have taught us, it's that races tighten as they get closer to election day. And that increase in uncertainty often leads to an increase in volatility.

 
 
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