Here's How To Spin The Fact That Scott Brown Won But Stocks Are Selling Off

The Business Insider ^ | 1-20-2010 | Joe Weisenthal

[blam]

Here's How To Spin The Fact That Scott Brown Won But Stocks Are Selling Off

Joe Weisenthal

Jan. 20, 2010, 7:03 AM

It's obvious, because as we pointed out last night, contrary to expectations, futures are heading south following the shock election of a Massachusetts Republican to the Senate.

Actually, not really.

But you did have the likes of Cramer predicting that a Brown victory -- because it would produce legislative gridlock -- would be good for stocks.

So the obvious rejoinder (if you're Cramer, or someone in his camp) is that the Scott Brown rally happened yesterday -- after all, everyone saw it coming, and that's all CNBC could really talk about -- and that today is just a sell-the-news kinda day.

[muawiyah]

Obviously the markets have already estimated the probabilities of a variety of actions and discounted them appropriately, raising stock prices in some cases, and dropping them in the dumper in other cases.

The market average is a dirivative of the two functions.

Lo and behold, the markets have once again perceived the situation with perfect foresight! (NOT).

[1raider1]

I think it’s because those who were bouying the market to give people the impression that zero was a success are now selling to punish us for doing a bad thing.

[2banana]

But you did have the likes of Cramer predicting that a Brown victory -- because it would produce legislative gridlock -- would be good for stocks.

Stocks bounced 60% with an all democrat congress, house and senate (60 votes) from March 2009 to now...

[BikerJoe]

For those who think the Healthcare industry is AGAINST Obamacare, you better look at how much money they plowed into Congress to shape that monstrosity. If Healthcare stocks sell off, it'll be because of the potential for Obamacare to fail.

Kinda like industries betting on Cap'n Trade.

[alicewonders]

I think it’s because those who were bouying the market to give people the impression that zero was a success are now selling to punish us for doing a bad thing.

BINGO!

[Concho]

Hmmm,,,,its all in the reporting. For a stock to trade, there has to be someone to sell and also someone to buy. So the “sale” cant just come out of thin air. The stock doesnt just go into a bucket in the corner. The seller sells because he gets money from someone. This is reported like there is no buyer.

[hosepipe]

Gridlock in Washington D.C.
IS A GOOD THING..... benefiting the voters instead of government workers..
Call it triage... or plugging the arterys of lifes blood..

[1rudeboy]

I’ll give points for one of the silliest headlines I’ve seen in a while.

[jersey117]

The futures are down because some of the banks’ earnings didn’t meet expectations.

[blam]

"The futures are down because some of the banks’ earnings didn’t meet expectations."

Yup.

U.S. Stock Futures Signal Dip; Banks Earnings Eyed

Wed Jan 20, 2010 5:36am EST

* U.S. stock index futures pointed to a lower open on Wall Street on Wednesday, with futures for the S&P 500 SPc1 down 0.38 percent, Dow Jones DJc1 futures down 0.37 percent and Nasdaq 100 NDc1 futures down 0.48 percent at 1018 GMT.

* Investors were bracing for a flurry of earnings from financial majors such as Bank of America (BAC.N), Morgan Stanley (MS.N) and Wells Fargo (WFC.N).

[snip]

[Between the Lines]

Anticipating rough sledding for the bill, the S&P health-care sector stock index surged by more than 2% Tuesday, leading all other industry sectors, with managed-care stocks posting strong gains.

http://www.freerepublic.com/focus/f-news/2432982/posts

[bereanway]

Buy on the rumor, sell on the news.

[blam]

Less Obvious Consequences of the Massachusetts Election

by: Bruce Krasting
January 20, 2010

I was watching the election results from Mass. with some people who know history better than I. None of us could come up with a historical parallel to the development that took place last evening. This one is going to go down as one of those ‘watershed’ events that you hear about.

The TV guys are all talking about what this could mean to the health care legislation. At this point, I could care less. I thought it was dead before and I think it is deader now. What I care about is what this means for some of the other significant issues that we face.

In my opinion the vote in Mass was a vote against the status quo. It was a loud enough vote for everyone in D.C. to hear. If there was any doubt that Americans are sick of the "same old, same old", this was it. The message was clear to me, “If you want to keep your job as an elected official you have to do things differently.” This will force changes across the board. Some things outside of health care that I think may be impacted:

[snip]

[Recon Dad]

If you are putting money down and base it on events like this you're just gambling, not investing.

[ZX12R]

DJI opens to a 90 point drop.

[BfloGuy]

The market went up yesterday in anticipation of his election — buy on the rumor, sell on the news. This isn’t surprising.

[reformedliberal]

The insider cronies who are part of whatever formal/informal PPT acting on behalf of the left is not interested in us at all. They are in the market to make money. They had profits; they took them. That’s all.

Brown’s win signaled a game change. Best to take your money off the table, keep your profits and study the situation so as to find the next best bet.

No one knows right now just what is going to happen vis-a-vis policy. However, the dollar rose, gold and oil fell, the past two days, even though they were opposite sorts of days in the stock market. Speculative ag commodities also mainly fell, even though there is inflation in food prices.

I have no idea what this means in the long term. I am still out of the market, for the time being. I know it has increased. I have been tempted to get back in several times. But I cannot trust much of the information available and, personally, I am just not equipped to trade quickly in and out on my own and I am not paying someone who may or may not know what they are doing another dime in management fees.

YMMV