Donald Trump opponents can say he’s “not my president,” but the money doesn’t think the protests will result in a different head of state.
The S&P 500, Dow Jones Industrial Average, Russell 2000, and Nasdaq indexes have all surged to new closing highs simultaneously on Tuesday, continuing on a rally sparked by Trump’s surprise win of the presidential elections earlier this month. The Dow was up again on Wednesday, though the S&P 500 did fall slightly.
The gains along with low volatility, implies that investors don’t see Hillary Clinton successfully contesting the results of the election—despite national protests against the polarizing president-elect.
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Markets have surged, in part post-election on Trump’s promise to boost fiscal spending, cut taxes, and just the certainty of knowing who will be president. If Clinton decides to contend the vote, as some #notmypresident protesters are seeking, that would upend all of that. The result: Markets would likely fall and enter into a period of much higher volatility as markets are left with greater uncertainty, said John Conlon, the chief equity strategist for People’s United Wealth Management.
“Investors are confident that Donald Trump will be the president come January,” Conlon said. “With Republicans having the control of Senate and House, they are putting high odds that Trump will get the policy format he’s espoused so far passed.”
For example, when 2000 Democratic presidential nominee Al Gore contested the results of election against George W. Bush, the S&P 500 fell 8.4% between election day that year, and Dec. 15, the day after Gore conceded following a Supreme Court ruling that ended the recount in Florida. Throughout that period, the CBOE Volatility index, or VIX continued to spike, hitting as high as 27.80.
Since election day this year though, the Dow has reached above 19,000, while the S&P 500 has risen 3%. The VIX has also steadily fallen to just under 13, from as high as 22.50 the Friday before election day.
Clinton, who was widely expected to win before election day, has also kept a low profile since apologizing to her supporters in her concession speech. She has called to give Trump a chance, saying “we are all rooting for his success.” Still, her concession speech did not calm voters who were vehemently opposed to Trump taking the White House. Protesters have argued that Clinton won the popular vote, and should be president, despite losing the Electoral College. A petition on Change.org calling for some members of the Electoral College to ignore their states’ vote, and cast their ballots in favor of Clinton on Dec. 19—the date when the presidency will be cemented. That petition has gained 4.5 million signatures.
Some half-a-dozen Democratic Electoral College members are are also now are also trying to convince their Republican counterparts to vote against Trump, Politico reported.
Still, even if investors aren’t expecting someone other than Trump to take the White House seat come December, they don’t expect totally smooth sailing. The VIX future contract that expires in a month is at 14.47, while the one expiring in June has hit 19.43, suggesting that traders expect more uncertainty and lower stocks into 2017.