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All that 'change' in the stock market; Hows that workin for ya?
Topic Started: Nov 7 2008, 11:57 PM (140 Views)
Dwayne
Profanity deleted by Hoss
As the cold hard reality begins to dawn on Wall Street, panic is setting in.
Quote:
 
FACTBOX-U.S. stocks in presidential election weeks
Fri Nov 7, 2008 10:27pm GMT

NEW YORK, Nov 7 (Reuters) - U.S. stocks broke out of their post-election funk on Friday, but on balance, the market hardly delivered a ringing endorsement of Barack Obama's defeat of John McCain to be elected 44th president of the United States.

Whatever the reason, since Election Day, major U.S. indexes are down more than 7 percent. For the Dow Jones industrial average .DJI and Standard & Poor's 500 .SPX, that represents the worst ever conclusion to the week of a presidential election.
On the week as a whole, including Tuesday's biggest-ever Election Day rally, Wall Street's benchmarks each fell about 4 percent.

For the Dow, it was the weakest presidential election week since Harry Truman's upset victory over Thomas Dewey in the 1948 election. For the S&P and Nasdaq Composite index .IXIC, meanwhile, it was only the poorest presidential election week since 2000, which had ended without any resolution to the disputed contest between George W. Bush and Al Gore.

STOCKS IN THE THREE DAYS AFTER A PRESIDENTIAL ELECTION

The following table shows the percentage rise or decline in the Dow Jones industrial average, Standard & Poor's 500 index and Nasdaq composite index in the last three days of the week of a U.S presidential election, as well as who won the Election Day vote.

Year Dow S&P Nasdaq President elect
2008 -7.08 -7.43 -7.46 Barack Obama
2004 +3.51 +3.15 +2.73 George W. Bush
2000 -3.19 -4.60 -11.32 No decision: G.W. Bush v Al Gore*
1996 +2.28 +2.34 +2.31 William Clinton
1992 -0.38 -0.56 +2.02 William Clinton
1988 -2.84 -2.63 -1.34 George H. W. Bush
1984 -2.02 -1.65 -0.42 Ronald Reagan
1980 -0.51 +0.11 +0.19 Ronald Reagan
1976 -2.38 -2.21 -1.02 James Carter
1972 +1.06 -0.22 -0.34 Richard Nixon
1968 +1.35 +0.82 --- Richard Nixon
1964 +0.16 +0.06 --- Lyndon Johnson
1960 +1.84 +1.38 --- John Kennedy
1956 -2.02 -2.65 --- Dwight Eisenhower
1952 +1.20 +0.73 --- Dwight Eisenhower
1948 -6.00 -7.16 --- Harry Truman
1944 +0.11 +0.31 --- Franklin Roosevelt
1940 +1.06 +0.81 --- Franklin Roosevelt
1936 +2.79 +1.40 --- Franklin Roosevelt
1932 +5.34 +8.02 --- Franklin Roosevelt
1928 +2.13 +1.99 --- Herbert Hoover
1924 +0.93 --- --- Calvin Coolidge
1920 -2.34 --- --- Warren Harding
1916 +0.41 --- --- Woodrow Wilson
1912 +1.13 --- --- Woodrow Wilson
1908 +5.28 --- --- William Taft
1904 +2.75 --- --- Theodore Roosevelt
1900 +7.03 --- --- William McKinley
1896 +5.86 --- --- William McKinley

STOCKS IN A PRESIDENTIAL ELECTION WEEK

The following table shows the percentage rise or decline in the Dow Jones industrial average, Standard & Poor's 500 index and Nasdaq composite index for the full week of a U.S presidential election and who won the Election Day vote.

Year Dow S&P Nasdaq President elect
2008 -4.09 -3.92 -4.30 Barack Obama
2004 +3.59 +3.18 +3.24 George W. Bush
2000 -1.99 -4.26 -12.24 No decision: G.W. Bush v Al Gore*
1996 +3.29 +3.84 +2.92 William Clinton
1992 +0.43 -0.26 +1.93 William Clinton
1988 -3.67 -3.04 -1.91 George H. W. Bush
1984 +0.19 +0.11 +0.64 Ronald Reagan
1980 +0.86 +1.34 +0.38 Ronald Reagan
1976 -2.27 -2.02 -0.97 James Carter
1972 +1.13 -0.43 -0.16 Richard Nixon
1968 +1.11 +0.86 --- Richard Nixon
1964 +0.43 +0.44 --- Lyndon Johnson
1960 +2.10 +1.77 --- John Kennedy
1956 -1.04 -1.36 --- Dwight Eisenhower
1952 +1.57 +1.06 --- Dwight Eisenhower
1948 -5.26 -6.49 --- Harry Truman
1944 +0.63 +0.70 --- Franklin Roosevelt
1940 +1.66 +1.35 --- Franklin Roosevelt
1936 +2.51 +1.16 --- Franklin Roosevelt
1932 +10.56 +11.63 --- Franklin Roosevelt
1928 +3.41 +2.73 --- Herbert Hoover
1924 +0.77 --- --- Calvin Coolidge
1920 -1.88 --- --- Warren Harding
1916 +1.29 --- --- Woodrow Wilson
1912 +0.88 --- --- Woodrow Wilson
1908 +5.26 --- --- William Taft
1904 +4.16 --- --- Theodore Roosevelt
1900 +9.97 --- --- William McKinley
1896 +9.97 --- --- William McKinley
* George W. Bush ultimately was determined the winner of the 2000 election.
Source: Reuters EcoWin


http://uk.reuters.com/article/usMktRpt/idUKN0748885920081107


We haven't hit bottom yet.
Edited by Dwayne, Nov 7 2008, 11:58 PM.
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RTW
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Vice Admiral
If I had the resources, knowledge and tes... courage to day trade, this market would be working out very well.

Someone I know just bought a big sum of Ford Motor Corporation .... for under $2 a share.
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Dandandat
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Time to put something here
It should be noted that it is likely that those who drive the market where not in support of an Obama presidency as he is clearly going to be targeting them in his administration.

Knowing that, the fall in the market, could be attributed to sore feelings rather than sound judgment on fiscal policy.

Not to say that its not doe to sound judgment on fiscal policy; It just must be considered that there are other forces at play as well.
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Dwayne
Profanity deleted by Hoss
^^^ I got two words about your theory...

Warren. Buffett.

Now I agree that the smaller investors may react negatively to Obama, but big investors make too much to worry.
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Swidden
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Adm. Gadfly-at-large; Provisional wRench-fly at large
Dwayne
Nov 7 2008, 11:57 PM
We haven't hit bottom yet.
I hope that we have hit bottom and that the markets will turn towards the better in months to come. If we've not hit bottom yet, I believe that we are close to it.

Personally, I do believe that the two days following last week's election was a response to President-elect Obama's victory. However, I think that is well factored in now. If the markets drop more due to President-elect Obama's influence it will likely come from announcements regarding his economic plans as the specifics become available.

In the months to come if we see a further significant drop I think it will come from the reports of how listed companies are doing. For most it is a foregone conclusion that we will be an official recession by the end 1Q 2009. Sooner or later the credit markets are going to really do more with lending. Someone will want to take advantage of potential opportunities in that area. I doubt that it will be as robust as it has been for some time yet, but I hope that we will see something resembling a sense of normality by the second half of 2009.
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Admiralbill_gomec
UberAdmiral
Interesting that the market is still tanking.

One thing a lot don't know is that a large reason for the pre-election drop was what some (my broker, and a few other investors I know) call the Obama factor. The market was factoring in an Obama win. Why would it drop so steeply? Obama wants to raise the capital gains rate from the current 15% to 28%. This was first mentioned in 2007 and remained a part of his platform. It would affect nearly 100,000,000 American investors. Even the lowest two income tax brackets (whose cap gains rate is 5%) would rise to 28%. I thought the market had already factored in the Obama effect, but I think I was too wishful.

So far, all Obama has talked about is raising taxes (income, cap gains, social security payroll, business) and increased government spending. That doesn't give investors warm fuzzy feelings.

Yes, there is a troubled economy, but, as I said that's only part of it. The other "elephant in the room" is not being discussed by the so-called "mainstream media."
Edited by Admiralbill_gomec, Nov 11 2008, 11:13 AM.
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Admiralbill_gomec
UberAdmiral
This from the Wall Street Journal:

http://online.wsj.com/article/SB122653625916922633.html

Looks like the market hasn't finished pricing in the "Obama effect."
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