THE MARKET IS ACTING LIKE THE ELCTION IS OVER, BUT IT IS FAR FROM OVER
In the past 4 days the S&P500 and the Nasdaq 100 have rallied 7.3% and 9.3%, respectively. Investors are acting like the election is over or almost over and we are past the moment of uncertainty. It seems as if Congress will remain divided, which has been interpreted as good for companies, but the presidential election is most likely far from decided. Trump has already asked for recounts. In some cases, state recounts are legally automatic.
Leaving aside the court battles that are already underway, TPA calculates the earliest we will know for sure who will be sworn in as President in 2021 will be 2 days before Thanksgiving.
With most of the votes counted, the margins in Georgia, Nevada, Wisconsin, and Pennsylvania are all less than 1% (images below from CNN). In Pennsylvania, that automatically triggers a recount. Even if Biden did not need Pennsylvania, this situation means that in Wisconsin, Georgia, and Nevada either candidate can request a recount. The table below shows the math if a recount is requested in all 4 states on Monday. Pennsylvania’s rules demand a completed recount 3 weeks after the election*. That is November 24 – 2 days before Thanksgiving.
Trump will not concede and we will not know who the 46th President of the United States will be until late into this month.
*STATE RULES FOR RECOUNTS
Razor-thin margins in this state make a recount highly likely. Candidates can request a recount if the margin is within 0.5 point. The request has to happen within two business days after the state certifies the election results. The certification deadline is Nov. 17.
Campaigns can request a recount regardless of vote margin within three days of the state canvass, which must be completed within six “working days” of the election. The recount must be completed within 10 days of the request. The campaign requesting the recount must pay for it.
Vote margins must be within 1 percentage point for a campaign to request a recount. There are no automatic recounts in the state, and the campaign that requests it must pay for it. It must be completed within 13 days of the formal recount order. The request must be submitted within three days of the state’s official county canvass.
There are mandatory recounts for any race that has a margin of 0.5% or less that must be completed within three weeks of an election. Campaigns can also request recounts, no matter the margin, within five days of canvass completion.