Wall Street braces for election uncertainty
A mixed day for Europe, while Wall Street is heading for its worst week since March as election day nears.
The downside risks that have been evident in these markets for weeks are slowly materializing and the next big uncertainty – the US election – is now upon us. It’s little surprise investors are heading for the havens, there’s hardly an abundance of good news out there.
The breakdown of stimulus talks on Capitol Hill was a bitter blow – and, bizarrely, seemingly an unforeseen one – and it’s been downhill since. The surging number of Covid cases and lockdowns in Europe has seriously taken its toll as well and stoke memories of March when the walls were closing in and it became a matter of when not if, we’d be next.
The lockdowns may not be quite as severe as earlier this year but when they arrive they will be very restrictive with some businesses forced to close, others seeing a fraction of the footfall and the rest of us spending most of our time at home as social gatherings are discouraged or banned altogether. It’s going to take a significant toll on the economy.
The US election takes place on Tuesday and whatever the result, investors will surely be hoping for the smoothest possible outcome. The headlines are all about the Trump/Biden race for president, with Biden appearing to have a commanding lead. However, both sides are keenly aware of the 2016 election, when the polls and the pundits predicted an easy win for Hillary Clinton, but it was Donald Trump who laughed all the way to White House. This time around, it obviously won’t be straightforward and there will be controversy but a challenge to the result will create the uncertainty this market – and the US itself – desperately needs to avoid. A bit of good news will be very welcome.