What markets want to avoid is a close election. How close the election is, is just as important as who wins. A close election means a contested election that drag out for weeks with a lot of uncertainty about who won.
Imagine if a long dispute over who won the election going on as the coronavirus pandemic rages. Nobody would be in charge as coronavirus cases explode during the winter months. The stock market hates uncertainty and this possible outcome.
President Trump has spent a considerable amount of time telling his base that mail-in ballots are fraudulent. There is a strong probability that Trump will do better as the poll votes come in but worse when the mail-in ballots are counted. Trump has already set up a legal challenge if the vote is close and he may even try to involve the Supreme Court now that the court has a republican majority. It could be messy and create a lot of uncertainty for markets if the election is close.
Uncertainty Around FDA Vaccine Approval
After the FDA released the briefing document for the October 22 advisory committee meeting being convened to discuss the approval process for COVID-19 vaccines, Raymond James analyst Steven Seedhouse said he sees “two major details” that stand out. First, the briefing document makes clear that FDA provided instruction directly to individual sponsors that it would require a two-month median follow-up for safety prior to an Emergency Use Authorization, which Seedhouse said “likely assures” there is no COVID-19 vaccine EUA consideration possible until around November 24-25 “at the earliest” for Pfizer (PFE) or Moderna (MRNA). Seedhouse also noted that the FDA said it will conduct a vaccine-specific AdCom prior to an EUA for any particular vaccine.
President Donald Trump’s illness is “another layer of uncertainty on top of the uncertainty that was already there,” says Trevor Greetham, head of multi-asset at Royal London Asset Management. He speaks on “Bloomberg Surveillance.”