The most problematic US presidential election headwind for markets and the US economy is not Harris’s or Trump’s political ideologies – it’s the growing skepticism among many Americans over the integrity of the electoral process itself.
This is the warning from Nigel Green, CEO of deVere Group, one of the world’s largest independent financial advisory and asset management organizations, as the race for the White House ramps up ahead of November 5.
He says: “Much of the current skepticism echoes back to the 2020 Presidential Election. Despite multiple independent investigations, recounts, and lawsuits that found no evidence of widespread voter fraud, a significant portion of the American electorate—particularly supporters of Donald Trump—continues to believe that the results of that election were flawed.
“Trump's own rhetoric has kept these doubts alive, and as he vies for office again in 2024, his base remains vocal about the possibility of election malfeasance.”
This pervasive distrust isn’t limited to a fringe group. Polls show that a considerable number of Americans across the political spectrum now question the integrity of the election process.
“It’s this fragility of public confidence that could shape the future not only of US politics but also of its financial prospects and stability.”
The deVere CEO continues: “For financial markets, uncertainty is a critical enemy. Markets thrive on predictability, and elections are often a source of volatility.
“Historically, markets react to the policies and platforms of presidential candidates, with investors adjusting their portfolios based on who they believe will win and the anticipated economic impact of that administration’s policies.
“But in 2024, the situation is more complex. Investors are not just evaluating policy differences between Harris and Trump; they’re also factoring in the possibility of election-related unrest or a contested outcome.
“The resulting wait and see approach from corporate America —whether through delayed investments or scaled-back spending—can be expected to translate into slower economic growth, especially if mistrust in the electoral process leads to market jitters extending beyond Election Day.”
A breakdown in trust in the electoral system has the potential to do more than just delay economic activity in the short term.
“It could erode the confidence that underpins the US economy's long-term health. Sustained skepticism about election integrity undermines the rule of law, which is fundamental to stable markets and economic growth,” notes Nigel Green.
“If businesses and consumers cannot trust that elections are free and fair, this could lead to a prolonged atmosphere of political instability, with capital retreating from US markets to safer havens elsewhere.
“Moreover, political uncertainty often results in legislative gridlock. Key policies aimed at economic growth—such as tax reforms, infrastructure investments, and trade deals—may be delayed or derailed entirely if election doubts lead to continued polarization in Washington.”
Most US strategists and pollsters are saying that the 2024 presidential election could be the closest in decades, if not a century.
Harris has been ahead of Trump in the national polling averages since she entered the race at the end of July.
The deVere Group CEO concludes: “The stakes for financial markets have never been higher. Corporate America is already pulling back, paralyzed by the fear that election cheating could spark a contested result and political unrest.
“The mounting distrust in the electoral process threatens not only the short-term stability of markets but also the long-term viability of sustainable economic growth in the US.”
