Do Supreme Court Deaths Impact Market?
The short answer is no. This weekend marked the death of a law icon. Ruth Bader Ginsburg’s passing has ignited a political firestorm in the middle of an already historically contentious election year.
Today’s sharp stock market decline was largely due to the fact that the third coronavirus economic stimulus bill, previous seen as likely, suddenly lacks political oxygen. While expectations ranged greatly as to how big this third major stimulus bill would be, most estimates put it at around ~5-10% of GDP, a sizeable economic boost to suddenly lose.
A singular event such as this is typically discounted by the market quickly, hence the sharp decline today. But we are also slowly digesting another impending political maelstrom, which is the coming historically contentious election. Investors will likely build up some defense leading into a significant uncertainty with very real downside; expect a bumpy October.