Markets opened up by about 1.5% this morning, with Big Media crediting renewed optimism that Congress and the White House will finally agree on more stimulus.
That’s got nothing to do with it.
The Reality Gap here is that traders and investors are now focused on the election, and the uncertainty that it brings.
Now, it’s not really the uncertainty of who will win that’s got people worried. It’s when and how we’ll know who won that has traders wringing their hands.
Because of the pandemic, record numbers of voters will be voting through the mail rather than in person. That might delay the ballot count, a delay that President Trump has suggested he might ignore.
That’s led traders and investors to worry that we may wake up the day after the election with both camps claiming their candidates won.
But on Friday, investment Goldman Sachs Group Inc. (GS) published a note arguing that this uncertainty was already priced in. JPMorgan & Chase Co. (JPM) made a similar argument over the weekend.