As Trump rails against election outcome, Wall Street shrugs

US President Donald Trump is mounting an unprecedented, and thus far unsuccessful, challenge to last week’s presidential election, but that hasn’t shaken Wall Street’s forward momentum.

Some analysts say the president’s multi-state legal challenge to Democratic candidate Joe Biden’s victory in the November 3 election is about boosting Trump’s image as he prepares to leave the White House, and unlikely to affect stock indices that have little tolerance for uncertainty.

“My guess is, Trump is building his brand for the next round of whatever publicity he’s going to try to garner for himself. It doesn’t appear to be a serious effort to derail the election results,” Maris Ogg of Tower Bridge Advisors said.

US stocks have thus far celebrated the outcome of the election, with the S&P 500 ending the latest trading week at a record high, however that’s not due to a preference for Biden but rather relief that the election ended swiftly.

Trump has, meanwhile, refused to admit defeat, instead making unfounded allegations of fraud and refusing to allow his government to cooperate with the incoming Biden administration.

Even as Wall Street writes off Trump’s legal challenges, concerns linger that his intransigence could erode governance and spook investors.

“These moves could not only impede a smooth transition of power but endanger national security as well,” Boris Schlossberg of BK Asset Management said.

“As the standoff turns to legal maneuverings, the markets could quickly take on a risk-off posture as the United States fails to have a peaceful transition of power for the first time in history.”

– Motivating the base –

The deadline for Trump’s manuevers seems to be December 14, the date by which members of the electoral college must vote and certify the election results that are tabulated at the state level.

Until then, Karl Haeling of LBBW bank said Trump’s strategy is to make sure his supporters don’t take their eyes off him.

“He wants to keep his base as excited as possible because he wants to tweet everyday and give his opinion on things, and try to control the Republican party through the popularity with the base,” Haeling said.

US media outlets have reported the president is exploring new ventures such as a streaming service, which would be cheaper than lauching a television station.

The idea would be to compete with Fox News, the preferred network of American conservatives with which Trump has had an increasingly shaky relationship.

As for markets, Trump’s moves could affect them “but on a very short term,” Haeling said.

“There is widespread belief among investors that Trump is not going to succeed in staying on as president,” he added.

– Sudden changes –

Ogg downplayed Trump’s refusal to concede, saying Biden’s experience as a former vice president means he’ll probably come in to office well prepared even if the president doesn’t cooperate with him.

“My guess is, if he really needs to know something, he will get a phone call. I’m not really worried about that,” she said.

More concerning are sudden regulatory changes by the outgoing administration that could rattle investors already fearful of the nationwide resurgence of Covid-19 cases, Haeling said.

On Thursday, Trump issued a decree prohibiting Americans as of January 11 from investing in about 30 Chinese companies linked to the military.

He also asked investors with financial interests in those companies, some of which are listed on Wall Street and in Hong Kong, to exit by November 2021.