The First Skirmish in the Chaos Election

Mr. Market still expects Trump to win. Historically, equity performance ahead of the election has been an excellent predictor, and now rising stock prices from August 3 point to Trump. In all of the very few cases when stocks have been wrong, the Republican candidate was elected. The risk is that markets are setting themselves up for disappointment if Trump loses. Yesterday’s Supreme Court deadlock on Pennsylvania’s mail-in ballot rules is an opening skirmish in a contested and litigated election that may lead to a Constitutional crisis. A full court won’t deadlock, and Roberts siding with the liberal justices will confer legitimacy when the high court acts a “friendly ref” for Trump through the crisis to come.