Recount 2016 Is Mini-Me Of 2000

The dreaded recount has begun in this “mini-me” version of the 2000 Bush v Gore election.  In 2000 there were merely hundreds of votes in one state deciding the election. Complicated by unclear ballots and court battles, it took 5 weeks to resolve leaving a divided electorate having to accept ambiguous results that remain to this day. An immediate 5% stock market correction occurred during that recount.

election-mess-2000-chart

Today’s election recount has less legal uncertainty than 2000, so far. Gore contested just one state in 2000 with only a few hundred votes in dispute delayed by multiple court rulings. This rare recount involves states where Trump leads by totals of between 10,000 to almost 70,000 per state. Recounts must by certified by December 13th. Failure to do so may require a vote by Congress January 6th to declare the official victor.  While a Hillary victory would certainly send stocks lower by 7 to 10%, we expect less severity with an initial drop Monday followed by a slow drip trading range of uncertainty until Trump is declared the winner between December 13th and January 6th. 

stocks-11-27-16

This may be a good period for investors to keep some powder dry for new purchases as we correct prior to the mid-December to early January decision window. Thus far Dr Evil’s attack of the “hanging chads” from the 2000 ruckus have not appeared, but “mini-me” may send a little fear into the markets and reverse recent trends.

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