U.S. Presidential candidates: market impact, economic impact

Democratic Party

U.S. Senator Hillary Clinton -- Market Impact: Neutral, Clinton's willingness to reduce the U.S. budget deficit is offset by likely health care & energy initiatives that would lower profits for big pharma and oil companies. Economic Impact: Neutral to Positive - Wall Street remains concerned about likely higher income and Social Security / Medicare [payroll] taxes. Overall Impact: Neutral to Positive.

Former U.S. Senator John Edwards -- Market Impact: Neutral to Negative, likely increased regulation in the health care, pharmaceutical and energy sectors, and possible additional Securities and Exchange Commission regulations, would not be warmly received by Wall Street. Economic Impact: Neutral to Negative, Edward's largely undefined populism creates perhaps the biggest fear for Wall Street: the unknown. Overall Impact: Negative.

U.S. Senator Barack Obama -- Market Impact: Negative, likely higher car MPG requirements, tougher environmental regulations, health care reforms, and other reforms, would weigh on the auto, raw material/mineral, health care, pharma and other sectors. Economic Impact: Neutral to Negative, Obama has been on the national stage for so short a time, it's difficult to form conclusions about his policy proposals, but it seems likely that his health care, education, and energy initiatives would require a substantial tax increase. Overall Impact: Neutral to Negative.

Republican Party

U.S. Senator John McCain -- Market Impact: Neutral to Positive, McCain's lower tax / limited government spending philosophy would be warmly received on Wall Street, but his likely stronger environmental regulations would not. Economic Impact: Neutral to Positive, McCain generally favors market-based solutions, and shuns protectionist arguments. Overall Impact: Neutral to Positive.

Former New York City Mayor Rudy Giuliani -- Market Impact: Neutral to Positive, Giuliani generally favors market-based solutions, but also is very tough on those who circumvent/bend/manipulate regulations. Further, Giuliani's leadership, courage, and calm in the aftermath of the September 11, 2001 terrorist attack on the United States remains etched in the minds of Wall Street's decision makers. Economic Impact: Neutral to Positive, Giuliani favors the free market/growth/jobs/prosperity equation, but he has nevertheless supported tax increases and expansion of social programs. Overall Impact: Neutral to Positive.

Massachusetts Governor Mitt Romney -- Market Impact: Neutral, Romney generally favors market-based solutions, and supports free trade, but his energy independence initiatives are a concern for the oil sector, and lateral sectors. Economic Impact: Neutral to Negative, Romney's health care, environment, and education initiatives most likely would expand the public sector. In particular, his State of Massachusetts health care program, if replicated at the federal level, would require a substantial income tax increase. Overall Impact: Negative.


Summary: It's early, in presidential election cycle terms. The candidates' policy proposals can and undoubtedly will change. Further, new candidates -- possibly a nominee winner -- could emerge. And new issues -- both domestic and international -- could elevate a candidate or drive another to obscurity. Hence, Wall Street, like the rest of the nation, will need at least another year of data points before forming final market/economic conclusions about the likely party nominees for U.S. President.