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Illustration: Aïda Amer/Axios

The death of Justice Ruth Bader Ginsburg and President Trump's vow to name her replacement to the Supreme Court before November's election are amplifying Wall Street's worries about major volatility and market losses ahead of and even after the election.

The big picture: 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. And it could take days or even weeks to count the record number of mail-in ballots and declare a winner.

What we're hearing: "Not getting the election results in a timely manner will be destabilizing," Lou Brien, rates strategist at DRW Trading, tells Axios. "Especially in light of how divided the country appears to be now."

  • "I think stock market moves will be violent intraday and the prevailing trend will likely be down, maybe sharply so."

The Supreme Court nomination will compound the partisanship and division in the event of a contested election, analysts at TD Securities say in a recent not to clients.

  • That not only will increase volatility but also "reduces the likelihood of Congress passing a phase 4 stimulus" package, Priya Misra, TD's head of global rates strategy, tells Axios.
  • It also means "we should be putting in a greater probability of a Blue Wave," wherein Democrats control the presidency and both chambers of Congress, she adds.

Flashback: The delay in deciding the winner of the 2000 presidential election caused great uncertainty and market volatility, with the S&P 500 falling 10% in the month following the election.

Watch this space: "Where we could get in a scenario that’s quite challenging is where we don’t actually know the makeup of Congress, primarily the Senate, or even worse the president," says Stephen Dover, head of equities for Franklin Templeton.

  • "It would be very hard to pass stimulus until that’s cleared up."

Be smart: Whether or not we get that stimulus is paramount, says Bill Callahan, an investment strategist at Schroders, as 30 million Americans remain on unemployment insurance and U.S. companies have filed for bankruptcy at the fastest pace since 2010.

  • "People are willing to say as long as this package is coming in the next three to four months we’re going to be OK."
  • "But if you say 'We’re going to let everyone fend for themselves for the next 24 months,' that’s not going to work out."

Between the lines: All eyes will be on the presidential race, but the real battle will be over the Senate, Dover tells Axios.

  • "Why is that important? Because the tilt of the Senate, especially if Biden wins, will allow him to make much bigger changes in policy than we’ve seen in the past."

The state of play: A repeal of Trump's 2017 Tax Cut and Jobs Act could have significant stock market implications immediately, and with a Democratic Congress Biden is expected to increase spending on health care, new jobs programs and renewable energy.

The last word: Many analysts remain bullish on the market's outlook after the election is settled — whenever that is.

  • "Any selloff that is caused mainly by some sort of an election or a political outcome often represents a great buying opportunity," Callahan says.
  • "Generally after elections, your worst fears or greatest aspirations don’t happen."

Go deeper

McConnell: "No realistic path to quickly pass" stimulus check increase

Senate Majority Leader Mitch McConnell (R-Ky.) said on Wednesday he does not see a "realistic path to quickly pass" a House-approved standalone measure for $2,000 stimulus checks, despite calls from President Trump for increased payments.

Why it matters: The move effectively kills any pathway to pass the bill before the end of the the 116th Congress.

14 mins ago - World

World leaders react to "new dawn in America" under Biden administration

President Biden reacts delivers his inaugural address on the West Front of the U.S. Capitol on Wednesday. Photo: Alex Wong/Getty Images

World leaders have pledged to work with President Biden on issues including the COVID-19 pandemic and climate change, with many praising his move to begin the formal process for the U.S. to rejoin the Paris Climate Agreement.

The big picture: Several leaders noted the swift shift from former President Trump's "America First" policy to Biden's action to re-engage with the world and rebuild alliances.

Updated 4 hours ago - Politics & Policy

In photos: The Biden and Harris inauguration

President Biden and first lady Jill Biden watch a fireworks show on the National Mall from the Truman Balcony at the White House on Wednesday night. Photo: Chip Somodevilla/Getty Images

President Biden signed his first executive orders into law from the Oval Office on Wednesday evening after walking in a brief inaugural parade to the White House with First Lady Jill Biden and members of their family. He was inaugurated with Vice President Kamala Harris at the U.S. Capitol on Wednesday morning.

Why it matters: Many of Biden's day one actions immediately reverse key Trump administration policies, including rejoining the Paris Agreement and the World Health Organization, launching a racial equity initiative and reversing the Muslim travel ban.