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Donald Trump’s US election legal threats ‘poised to spark global economic meltdown’
November 6, 2020
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The election that first looked to be on a knife-edge appears to be slowly tipping in Joe Biden’s favour. He has won several key states in recent hours, with only seven left to count. So far, Mr Biden has 243 Electoral College votes, while the incumbent President Donald Trump has 214.
To win the presidency, a candidate needs 270.
The highest voter turnout since 1900, some 67 percent of eligible voters cast their ballot compared to 2016’s 60 percent.
This election has also seen unprecedented levels of mail-in ballot due to the coronavirus pandemic.
As a result, counting the votes has been significantly slower – a point in which Mr Trump has fiercely contended and demanded be stopped.
READ MORE IN OUR US ELECTION 2020 LIVE BLOG
He says states continuing to count votes should be prevented from doing so, accusing the Democrats of “fraud” and “cheating”, having already launched legal action to halt counting in Pennsylvania and Michigan.
It is a turn of events that investment directors AJ Bell told Express.co.uk could mirror the onset of the harsh stock market fall that occurred in the similar 2000 election controversy between Al Gore and George W Bush in 2000.
Here, a vote too close to call in Florida, even after several recounts, meant the result was delayed for weeks.
In this time, the US’ S&P 500 stock market steadily declined, taking its sharpest drop by the time the case reached the Court to – 11.7 percent.
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Now, Mr Trump’s lawyer, Rudy Giuliani, has condemned the voting system in several states and has already travelled to Pennsylvania to contest the election results there.
He has since announced that he and Mr Trump’s campaign team will take the vote to the Supreme Court.
The S&P 500 initially surged as it looked possible that Mr Trump might be on to an election victory on Tuesday.
Even as things took a turn in Mr Biden’s favour late on Wednesday, the S&P 500 gained 2.1 percent, as well as a handful of markets growing, including the Dow and the Nasdaq.
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How long this upward surge might last, however, is up for debate.
In 2000, the prolonged nature of the election result had lasting negative effects on financial systems.
By the time the dust had settled following the Court’s decision, the S&P 500 had lost 12 percent of its value.
AJ Bell said things are slightly different now as the Democrats are unlikely to win control of the Senate, the result being a limitation on their ability to push things through like tougher regulation on banking, technology and the pharmaceutical industry.
However, as the firm told Express.co.uk: “The disputed ballot was not the only issue for investors to ponder 20 years ago, not least because the technology, media and telecoms (TMT) bubble had started to leak air.
“The bubble’s collapse (not forgetting the 09/11 terrorist attacks) became the defining theme of 2001 as the S&P 500 index lost more than a fifth of its value in the 12 months after the Bush-Gore vote.
“As such, politics will not be the only near-term influence upon market sentiment: monetary policy from the Federal Reserve, the pandemic and corporate earnings will all have a major say, especially as the US stock market looks very expensive on some metrics after its stunning multi-year run, which was only disturbed briefly in the spring by COVID-19.
“Expectations are high and any disappointment could leave share prices exposed – unless the Fed steps in, which it could easily do.”
Should the decision eventually go to the Supreme Court, AJ Bell suggested that the delay in announcement could have a knock-on effect on the rest of the world.
They explained: “A lengthy dispute over who leads the world’s biggest economy, that is home to its biggest stock market, biggest bond market and its reserve currency, and the only real military superpower would not look good and would not usually be good for sentiment.”
When Mr W Bush was eventually sworn in weeks later, significant financial damage had already been done.
Meanwhile, as Mr Trump’s team focuses its ire on Pennsylvania, the state’s governor, Tom Wolf, cautioned Pennsylvanians that the full results may take several days.
Writing on Twitter, he said: “We may not know the results today, but it’s important that we have accurate results.
“Make no mistake: our democracy is being tested in this election. I’ll do everything in my power to ensure that the results are fair and that EVERY VOTE is counted.”
Election officials there have said the ballot counts in some areas won’t be finished at the same time as other states because of the state’s new mail-in voting law.
It is one of the few states where officials had to wait until election day to begin counting absentee ballots, which has delayed the process.