Wednesday, November 07, 2012

Well, two out of three ain't bad

Well, the results are in and as predicted ....

"Scenario 4 - President Obama wins both the electoral college and popular vote. Again, I think the market's would welcome this news because it would remove some uncertainty but then the focus would shift to the House to see what sort of political capital the President would have earned."

It appears as though the President did win both the popular vote and the electoral college which was an outside of the box concept on Monday.  However, the market's reaction has been anything but positive.

My expectation was that the market would look at the election maintaining the status quo - President Obama, Ben Bernanke, Democratic Senate and Republican House - and expect much of the same for the next four years.  The market may still come to that realization but the early results seem to be "sell, sell, sell".

But, why?  Well, we can look at the obstructionist comments from the House leadership last night which will make it very hard to deliver meaningful legislation needed to avoid the fiscal cliff.

Or maybe it's just Apple breaking down as a stock. It's hard to say that a stock that is up $160 billion in mkt cap or 40% in the past 12 mths is breaking down, but since the iphone 5 flop.... I mean launch way, way back 6 weeks ago, the stock has lost a staggering $140 billion in market cap and has broken through many technical levels.  One of the 10 greatest risks to the stock market is our reliance on Apple as a stock.

Finally, people could just be suffering from President Obama fatigue and they are voting with their wallets. 

I suspect the major drivers of the market in the next 2 months will be ---
* Europe's economy
* The war drumbeat with Iran
* Sandy's impact on the Northeast economy
* and finally, that fiscal cliff.......

It should be interesting.

Thanks for voting!

PS - look for the NNY Math commercial on various cable channels in the North Country.  You can also check it out on our website.  www.nnymath.com  Thanks! 

No comments: