Markets want to see a clear victory for either President Donald Trump or Democratic nominee Joe Biden within a week of the Nov. 3 contest. If there’s a contested election, stocks could slide as much as 20%.

That’s according to a team of BofA economists and strategists led by U.S. economist Michelle Meyer and equity and quant strategist Savita Subramanian. A “landslide victory for either Trump or Biden and rapid election conclusion would likely be welcomed by markets while a severely contested election could see risk-off and drive 10-year rates materially lower,” they wrote in a research note.

A rocky transfer of power or limbo until December, or even until the Jan. 20 inauguration would make for a worst-case scenario for markets.

“If Trump leads on Election Day with a large backlog of absentee and mail-in ballots, stocks could see more volatility until more results come in,” they said. If the count is close, with ballots in question and state recounts, investors may respond as they did during 2000, when the S&P 500 sold off 5% before the Supreme Court called the election for George W. Bush on December 12.

Declines will be sharper if either side refuses to accept the results, with the economy set for an “uncertainty shock” as confidence stumbles -- with businesses delaying hiring and investments, while households turn to precautionary saving -- and as doubts about fiscal stimulus mount.

Here’s what BofA expects for stocks with in two election outcomes:

• A Republican sweep would initially be positive (with little change to a gain of 5%), with beneficiaries including real estate, dividend yield, restaurants and services firms; multinationals would lag.
• Democratic sweep would be initially neutral (with a drop of as much as 5% to a gain of as much as 5%), and longer positive, with cyclicals and small caps benefiting while energy and luxury goods may be hurt.