Posted on 09/13/2010 12:17:11 PM PDT by Qbert
The Standard & Poor's 500 Index [.SPX 1119.94 10.39 (+0.94%) ] has jumped more than 6 percent from its August low two weeks ago with credit being given to some slightly better-than-expected employment figures, an improving credit picture in Europe and a flight out of low yielding bonds into equities.
But some on Wall Street believe another force is driving prices: a Republican Revolution.
The Intrade contract predicting the Republicans long shot chances at actually taking the Senate has increased to as much as 30 percent this September, from a low of about 17 percent last month. The prediction market site, where actual money changes hands, has the Republicans with a more than 70 percent chance of controlling the House, a result already widely expected.
“As the polling numbers extend for the Republicans, look for more equities upside,” said Jon Najarian, co-founder of TradeMonster.com and a ‘Fast Money’ trader. “Just taking the House is a bet on gridlock, which most of your business types will say Amen to. Taking both is a bet on a much higher percentage of Dems willing crossover and that means friendlier to business.”
On Wednesday, President Obama unveiled the next step in his economic recovery plan, including incentives for business to create plants here in the U.S. and increased spending on infrastructure. Investors shrugged the plan off, giving it little chance of going through before the elections.
[Snip]
“This is the catalyst for higher equity prices,” said Veracruz LLC’s Steve Cortes, who sold his safe haven gold trade on the chances of a big Republican win. “The most business-unfriendly DC in decades is about to change dramatically. The Tea Party is a real force and mid-term elections are about turnout.”
(Excerpt) Read more at cnbc.com ...
My theory exactly.
From oilprice.com...A Republican win in Nov will result in huge winners. Crude will likely go to over $100/barrel. Coal will benefit from relaxed environmental regulation. Healthcare like Pfizer and United Health will benefit as well.
When they get in there they need to not be bothered by what the media says about them, or being called “obstructionist”, or about being called the “do nothing Congress”,
because doing nothing IS doing something very positive.
Pass budgets that defund the alphabet agencies, and especially 0bamacare.
Seems possible.
That’s not going to happen, but the more the worst of the market’s fears pass, the more the economy will start a tentative recovery.
Absolutely it is. I’ve been telling my clients that for a couple of months now. The question is, though, will they get in there and actually be fiscally conservative??
There will need to be a lot of real changes to make an impact on business. Just gridlock will not help a lot.
I will be fully invested here for a while, but after the election reality will set in if the GOP doesn’t follow thru and the markets will slump.
There will need to be a lot of real changes to make an impact on business. Just gridlock will not help a lot.
I will be fully invested here for a while, but after the election reality will set in if the GOP doesn’t follow thru and the markets will slump.
feeling good may be partly responsible, but solid earnings are at the root.
Fischer in Forbes wrote a nice piece describing how most corporations are meeting or exceeding earnings expectations.
They have learned to prosper in the slowed economy.
Not only that, companies are sitting on tons of cash, ready to invest if the climate ever dictates that they should.
“From oilprice.com...A Republican win in Nov will result in huge winners. Crude will likely go to over $100/barrel. Coal will benefit from relaxed environmental regulation. Healthcare like Pfizer and United Health will benefit as well.”
...and the extreme left will seethe and begin the gnashing of teeth at the capitalist profits “hurting the poor”. :-)
This has happened on several occasions and is a normal economic happenstance. When repubs take control, business sees a good future ahead.
Been sayin’ that for months.
if you remember back in 2008, the two days after Obama got elected, the stock market tumbled several hundred points. great post
I bought stack of November SPY calls (strikes 112 and 114) a few weeks back when the S&P was in the 1040-1050 range - I did so on the premise of an 11/2 blow-out. So far, so good!!!
I fully agree. Obama's fiat economy will have it's mega-fund-driven 'bullish' days, as the uncontrolled, massive national debt continues soaring, adding trillion after trillion, while the banksters Fed paper money printing press's operate 24-7.
Sooner (likely) or later the second phase in the crash-in-stages will happen again, and it shall be far worse than 2008's crash.
Of course. The entire country is starting to feel like maybe it’s true that “help is on the way” on Nov. 2. They are depending for all their worth on all the little people getting out to the polls en masse to stop the madness.
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