Justice Ruth Bader Ginsburg's death, and the fight over her replacement, are amplifying Wall Street worries about major volatility and market losses ahead of — or even after — the election, Axios Markets editor Dion Rabouin writes.
- The 2020 election is the most expensive event risk on record, per Bloomberg — with insurance bets on implied volatility six times their normal level, according to JPMorgan analysts.
- "Not getting the election results in a timely manner will be destabilizing," Lou Brien, rates strategist at DRW Trading, tells Axios.
The Supreme Court fight will compound partisanship and division in the event of a contested election, analysts at TD Securities say in a note to clients.
- "[W]e should be putting in a greater probability of a blue wave," which would leave Democrats with control of the presidency and both chambers of Congress, Priya Misra, TD's head of global rates strategy, tells Axios.
Wall Street is also closely watching the Senate.
- "[T]he tilt of the Senate, especially if [Joe] Biden wins, will allow him to make much bigger changes in policy than we’ve seen in the past," says Stephen Dover, head of equities for Franklin Templeton.
A repeal of President Trump's tax cut could have immediate stock market implications.
- With a Democratic Congress, Biden would be expected to increase spending on health care, new jobs programs and renewable energy.
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