BlackRock: The market has not reflected the risks of U.S. presidential candidates questioning the election results

ChainCatcher news, Jean Boivin of BlackRock Investment Institute stated that the market is underestimating the risk of disputes over the election results among U.S. presidential candidates next month. A controversial victory could lead to "weeks of very chaotic legal battles," which could shake risk assets.

While the stock market remains close to historical highs, government bonds have already been hit by a sell-off. Attempting to trade the U.S. election is "foolish behavior," and the real focus should be on the scenario of a disputed election, which the market has not fully reflected. If investors want to prepare for a certain situation, a disputed U.S. election result is one of those scenarios. Due to the tight race, voters and investors are increasingly likely to wait until after election night to know the results—especially if any candidate chooses to contest the vote count in key swing states.