Michael Cembalest, chairman of marketing and investment strategy at JPMorgan Asset Management, warned in a report Wednesday on “risks far beyond the US horror story” and the “Constitution.”
“Bottom line: a lot of unnatural things have to happen for Trump to be elected,” wrote JPMorgan strategist. “Although, I did not decide anything.”
But if investors do not know who will be in charge of the world’s largest economy, they can easily sell and ask questions later.
“Markets could react negatively if the United States, the world’s second-largest currency, is seen as slipping down the path to illegal elections due to post-election adjustments by political parties,” Cembalest wrote.
‘Opening Dueling Ceremony’
To be sure, legal experts say Trump’s long bid to overthrow the election was just such an act, a long shot. Put simply, Trump is losing by too many votes in many states.
However, JPMorgan strategists have put in place a number of developments that could cast doubt on that outcome, including one or more states sending candidates to the polls. Those ballots will be dealt with on January 6 by the General Assembly through the rules set out in the 1887 election law.
According to Cembalest, “a nightmare situation for the market”, if Republicans announce the ECA constitution, do not allow three states to replace Trump to give him the necessary 270 votes, and Democrats refuse to participate.
Another risk posed by Cembalest is that if Barr directs investigators to “seize or enforce election records” to investigate voter card fraud, it will slow down the process.
Dimon: ‘We have a new president’
For the most part, investors appear to have ignored Trump’s war on election results.
Market did not discuss the news headlines about the prosecution of his campaign board. If anything, Wall Street came out on the election results even before CNN and other media outlets expected Biden to be the winner.
Investors focused on a number of other issues, including U.S. senator makeup, advancing the development of a coronavirus vaccine against the deadly epidemic and the prospect of economic recovery.
But some are starting to worry about the transfer of power.
While expressing concern about the peaceful transition to aspirations, “I think we are doing this too lightly.”
Liz Ann Sonders, chief investment strategist at Charles Schwab, said that although her company’s experts did not see much risk to the erroneous voters, “there could certainly be more political events going on.”