Investors have always given Donald Trump the benefit of the doubt. They have consistently ignored Trump’s tariffs and capricious interventions and focused solely on his tax and regulatory cuts. Why? I think it is because they see him as a businessman, and thus a kindred spirit, regardless of his other shortcomings. You could call it identity investing.
But Wall Street hates uncertainty. The prospect of a prolonged conflict after the election, and even blood on the streets, has to be unnerving. Logically, that should be particularly true after Trump’s completely unhinged performance at last night’s debate.
Will we see problems with the markets if the aftermath of the election is as Trump advertises? My guess is yes, but not until then; investors are still in denial as of today.