What does this US political wreckage mean for the economy and financial markets?

This inconclusive and likely contested result is the worst one imaginable for markets and the US economy. How do investors “price in” a fractured polity and broken institutions? Ben Chu explains

The reaction in financial markets overnight, on the face of, was a rational processing of the new reality that there is no “blue wave” of Democrat victories.  (REUTERS)

Investors, they say, hate uncertainty. Well, they’re going to really hate the morning of 4 November 2020 – and quite possibly the days and weeks that follow.

What makes the apparently inconclusive result of the 2020 presidential election even worse for investors is that financial markets had been primed, if not for certainty, then perhaps for the closest thing to it in politics.

Polls suggested a “blue wave” of Democrat victories – not just a comfortable win for Joe Biden against Donald Trump in his race for the White House but also the Democrats taking control of Congress too.