2000 redux? Stock-market election fears have traders revisiting Bush-Gore battle – By William Watts (Marketwatch) / Sept 24 2020
As fears of a contested presidential election rise, investors are taking a look at how the market behaved during the closest precedent — the 2000 Florida recount battle between Democrat Al Gore and Republican George W. Bush.
The chart above tracks the performance of the S&P 500 SPX, +0.29% from Election Day, which fell on Nov. 7, through Dec. 15. Over that period, the S&P 500 saw ups and downs, declining 8.4%.
2000 might not offer much of a road map, making it difficult to draw many conclusions about what a contested outcome following the Nov. 3 election pitting President Donald Trump against Democratic challenger Joe Biden would mean for the market. But activity in the options market, as reflected by the Cboe Volatility Index futures curve, shows how traders see the potential for an extended period of volatility beyond the election.
The 2000 contest wasn’t the first muddled presidential election result in U.S. history, but they’ve been rare. Three elections in the 19th century were decided by the House of Representatives or after congressional intervention.
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