Show an ad over header. AMP

A "three-headed monster": Wall Street braces for more turbulence ahead of Election Day

Wall Street is digging in for a potentially rocky period as Election Day gets closer.

Why it matters: Investors are facing a "three-headed monster," Brian Belski, chief investment strategist at BMO Capital Markets, tells Axios — a worsening pandemic, an economic stimulus package in limbo, and an imminent election.


  • Investors have digested spiking odds of a Joe Biden win and the likelihood of a blue wave The possibility of a contested election remains a wild card.

Where it stands: The S&P is on pace for the worst week since June, despite yesterday’s partial rebound.

  • For the Dow, it’s set to be the worst week since March.

What's new: Skyrocketing coronavirus cases in the U.S. and Europe are "competing for investors' attention at the same time as we lead up to the election," says Michael Reynolds, investment strategy officer at Glenmede.

  • The threat of further lockdowns (which are already happening across Europe) alongside a worsening outbreak could dent corporate earnings and the fragile economic recovery.

What they're saying: "The market priced in absolute perfection. Any type of sneeze, any type of cough and everyone gets scared," Gene Goldman, chief investment officer at Cetera Investment Management, tells Axios.

Between the lines: The VIX index, which measures market volatility, touched the highest level since June, though it's nowhere near the elevated levels seen earlier this year.

  • Volatility "tends to spike ahead of elections and relative calm returns shortly after the election is decided," Nasdaq's chief economist Phil Mackintosh said yesterday — except in the case of 2000 (the last contested election) and in 2008 (during the financial crisis).
  • But VIX futures indicate investors are betting that election volatility lasts for an extended stretch, Mackintosh notes.

Yes, but: With the exception of 1988, the S&P 500 has seen a positive return from the Tuesday before the election to Election Day ahead of the last 12 presidential runoffs, according to data from Goldman Sachs.

  • The S&P 500 is on track to buck that trend this election year (but there’s still time for the index to fully recover losses).

Gina Haspel almost resigned over plan to install Trump loyalist Kash Patel as CIA deputy

CIA Director Gina Haspel almost resigned in early December after President Trump cooked up a hasty plan to install loyalist Kash Patel, a former aide to Rep. Devin Nunes (R-Calif.), as her deputy, according to three senior administration officials with direct knowledge of the matter.

Why it matters: The revelations stunned national security officials and almost blew up the leadership of the world's most powerful spy agency.

Keep reading... Show less

NRA files for bankruptcy, says it will reincorporate in Texas

The National Rifle Association said Friday it has filed for voluntary bankruptcy as part of a restructuring plan.

Driving the news: The gun rights group said it would reincorporate in Texas, calling New York, where it is currently registered, a "toxic political environment." Last year, New York Attorney General Letitia James filed a lawsuit to dissolve the NRA, alleging the group committed fraud by diverting roughly $64 million in charitable donations over three years to support reckless spending by its executives.

Keep reading... Show less

Biden: "We will manage the hell out of" COVID vaccine distribution

President-elect Joe Biden promised to invoke the Defense Production Act to increase vaccine manufacturing, as he outlined a five-point plan to administer 100 million COVID-19 vaccinations in the first months of his presidency.

Why it matters: With the Center for Disease Control and Prevention warning of a more contagious variant of the coronavirus, Biden is trying to establish how he’ll approach the pandemic differently than President Trump.

Keep reading... Show less

Washington can expect a "new normal" — even after Biden's inauguration

D.C. Mayor Muriel Bowser said Friday that the city should expect a "new normal" for security — even after President-elect Biden's inauguration.

The state of play: Inaugurations are usually a point of celebration in D.C., but over 20,000 troops are now patrolling Washington streets in an unprecedented preparation for Biden's swearing-in on Jan. 20.

Keep reading... Show less

Outgoing VP Pence calls Vice President-elect Harris to offer congratulations, help

Vice President Mike Pence called Vice President-elect Kamala Harris on Thursday to congratulate her and offer assistance in the transition, the New York Times first reported.

Why it matters: The belated conversation came six days before the inauguration after a contentious post-election stretch. President Trump has neither spoken with President-elect Joe Biden, nor explicitly conceded the 2020 election.

Keep reading... Show less

CDC: Highly transmissible coronavirus variant could become dominant in U.S. in March

New variants of the coronavirus circulating globally appear to increase transmission and are being closely monitored by scientists.

Driving the news: The highly contagious variant B.1.1.7 originally detected in the U.K. could become the dominant strain in the U.S. by March if no measures are taken to control the spread of the virus, the Centers for Disease Control and Prevention said Friday.

Keep reading... Show less

Abbas announces first Palestinian elections in 15 years

Palestinian President Mahmoud Abbas published a decree on Friday announcing the dates for parliamentary and presidential elections in the Palestinian Authority.

Why it matters: This is the first time in 15 years that such a decree has been published. The last presidential elections took place in 2005, with Abbas winning, and the last parliamentary elections took place in 2006, with Hamas winning.

Keep reading... Show less

Trump blocks banks from limiting loans to gun and oil companies

Big banks are no longer allowed to reject business loan applicants because of the industry in which they operate, according to a new rule finalized on Thursday by the Trump administration.

Why it matters: Wall Street has curtailed its exposure to industries like guns, oil and private prisons, driven by both public and shareholder pressures. This new rule could reverse that trend.

Keep reading... Show less

Insights

mail-copy

Get Goodhumans in your inbox

Most Read

More Stories