By Friday, they were quickly shifting gears on the basis that Trump’s positive result would deal a blow to his campaign and lessen the overall chances of a contested election outcome.
“Trump contracting the coronavirus will elevate institutional money’s preparation for a Democratic White House and all the tax, trade and budget implications that go along with it,” James McDonald, CEO of Los Angeles-based fund manager Hercules Investments wrote in a note.
“We expect institutional investors to start de-risking portfolios and increasing hedges in preparation for market volatility.”
Oil prices dropped on the news and stocks saw an initial selloff in a volatile morning trading session. L8N2GT1IW
Major banks have been running simulations to ensure they can cope with a spike in market, liquidity and credit risks in case of a contested election or even a constitutional crisis.
One senior capital markets banker said on Friday that their institution