The market, which to say the least has not been kind to 401Ks lately, rallied during Tuesday's morning session, with the Dow up 270 points to 9,591 at mid-day. What's driving it? Is this an Obama rally or a relief rally?
Economist Peter Dawson, who took his daughter Laurie to the voting booth Tuesday morning for "a cool, local civic lesson," tends to side with the latter.
"Given the economic, fiscal and, let's face it, financial system challenges facing the nation, and the intensity of the presidential campaign, my sense is that the market and nation are probably just happy the campaign season is over," Dawson said. "The market knows that one way or another, we will have a new chief executive in place, which means decisions will be made to tackle those problems and the market may be getting out in front of that."
Economist Richard Felson agreed with Dawson but argued that the expected performance of U.S. Sen. Barack Obama, D-Illinois may also be playing a role.
"The market may be seeing higher taxes up ahead, assuming an Obama win, and while that sounds like bad news for investors, it has a ray of light in it," Felson said. "First, it means an attempt at budget deficit reduction and it also erases an unknown. Obama is going to push for tax increases but he's not the enemy of capitalism some make him out to be. We're not dealing with a Neil Kinnock here."
Kinnock was Labor Party leader (1983-1992) and a Member of Parliament (1970-1995) in the United Kingdom.
According to Gallup.com, U.S. Sen. Barack Obama ( D-Illinois) led U.S Sen. John McCain (R-Arizona) 55%-44% in the organization's final tracking poll. Voter turnout was termed heavy in several key battleground states, The Washington Post reported Tuesday.
Market Analysis: Investors and traders can also look at the Dow's rally in this context: it pushes the Dow higher above key technical support and also above psychological support at 8,000. Now 8,000 may look like an ocean away from today's trading levels, but as recent financial events have demonstrated, it's not that far way. Hence, the goal is not so much to rally as to build the case that the Dow is forming a bottom.
Closing Bell: Economic Catapult for Thanksgiving & Black Friday (WMT, TGT, GRMN, GOOG, MSFT)
Deere up on Q4 earnings performance
Reid Hoffman: LinkedIn will go public (at some point)
Reader Comments (Page 1 of 1)
11-22-2008 @ 5:19AM
Lisa P said...
A strong Obama administration has begun to emerge. What could be a person’s motives of planning to work in Mr. Obama’s cabinet or be one of the staff? With all the information Obama asks in his seven-page, 63-question application, you would think the administration would have enough to perform credit repair for everyone who applies. CNN reveals a copy of the questionnaire, which requires all applicants to not only thoroughly elucidate everything they’ve done in the last 10 years or more, but also do the same for their spouse. I hope applicants do indeed get the free credit repair as part of the deal. This is only a taste of the how deep the application goes. So remember, if you plan on taking part in the Obama-Biden “Change” Administration, you’ve better get to stepping. Click to read more on Credit Repair.