The day after election day - Will the DJI rise or fall?

[Eeezee]

Be sure to specify which candidate you think will win and what the stock market will do in response. This is naturally a big event, and with such a volatile market who knows what might happen?

 

[fleshconsumed]

It's pointless to guess, but I'd say it will rise either way.

 

[winnar111]

Depends on who is elected.

The last time we raised capital gains was 1987 and led to a market crash.

The last 2 times we cut capital gains in 1997 and 2003 led to market booms.

 

[Engineer]

Originally posted by: fleshconsumed
It's pointless to guess, but I'd say it will rise either way.

This. Market hates uncertainty and will have at least a certainty once it's over. Besides, anybody is better than Bush, lol.

 

[Lemon law]

The dow will rise on November 5, it always does. What its doing six or eight months down the road is more important.

 

[Engineer]

Originally posted by: Lemon law
The dow will rise on November 5, it always does. What its doing six or eight months down the road is more important.

Very true. It was interesting to note that an article was produced a few years ago (maybe stunt posted it) showing that the markets were almost flat during the first two years of the Presidential term and rose greatly during the last two years (on average). Poor ole Bush broke the mold on that on, leading to possibly the largest drop in the market in it's history (for one year).

 

[sandorski]

yes

 

[techs]

Rise. You heard it here.

 

[dmcowen674]

Originally posted by: winnar111
Depends on who is elected.

The last time we raised capital gains was 1987 and led to a market crash.

The last 2 times we cut capital gains in 1997 and 2003 led to market booms.

Good, then it needs to crash :thumbsup:

 

[techs]

Originally posted by: winnar111
Depends on who is elected.

The last time we raised capital gains was 1987 and led to a market crash.

The last 2 times we cut capital gains in 1997 and 2003 led to market booms.

Followed by market crashes. Big time.

 

[winnar111]

Originally posted by: techs

Originally posted by: winnar111
Depends on who is elected.

The last time we raised capital gains was 1987 and led to a market crash.

The last 2 times we cut capital gains in 1997 and 2003 led to market booms.

Followed by market crashes. Big time.

Tell that to Bill Clinton who was screaming on about the great economy during the time and how his tax cuts worked.

 

[alchemize]

Who cares unless you are a day trader.

 

[ProfJohn]

Supposedly the market may already include an Obama discount so a McCain victory could lead to a large rally.

If Obama wins and the Democrats hit 60 in the Senate watch for it to drop a lot on the day after. The idea of anti-business liberals having complete control of the government is going to scare the hell out of Wall Street.

 

[Harvey]

Originally posted by: Eeezee

Topic Title: The day after election day - Will the DJI rise or fall?

Yes. Unless it closes at the opening level.

 

[nageov3t]

frack, if just nominating Obama was "the moment when the rise of the oceans began to slow and our planet began to heal... the moment when we ended a war and secured our nation and restored our image as the last, best hope on Earth" just imagine what electing him will do for the economy.

 

[Thump553]

Originally posted by: ProfJohn
Supposedly the market may already include an Obama discount so a McCain victory could lead to a large rally.

If Obama wins and the Democrats hit 60 in the Senate watch for it to drop a lot on the day after. The idea of anti-business liberals having complete control of the government is going to scare the hell out of Wall Street.

Where do you get this nonsense of an "Obama discount"? Any references to a link referring to it? I'm an investor in the stock market and frankly I'll be greatly relieved once we are insured of a sane hand at the tiller of this great country. That certainly wouldn't be the case under any of the numerous "soundbite" economic programs McCain has proposed. I've never heard of any analyst talking about a purported "Obama discount"-it sounds like another fear-mongering GOP talking point to me.

You are correct that the market, of course, anticipates what is probably coming. After all, the market is composed of human beings making decisions based upon their best guess at to what future events will be. I would say at this point it is a safe bet that most investors in the market are assuming an Obama victory.

 

[Harvey]

Originally posted by: loki8481

... just imagine what electing him will do for the economy.

I have, and I'm looking forward to it. :thumbsup:

The problems your Traitor In Chief and his criminal cabal have left us are so grave that there's no guarantee an Obama administration will be able to turn things around.

OTOH, if McCain is elected, I think we'd face certain further economic and financial catastrophy. More of McSame is exactly what this nation does NOT need. :thumbsdown:

 

[ProfJohn]

Originally posted by: Thump553
Where do you get this nonsense of an "Obama discount"?

How about US News and World Report?
link

Are investor concerns about an Obama presidency influencing the stock market? And by "concerns" I mean "existential panic." And by "Obama presidency" I mean "a tax-hiking and regulatory reign of terror." And by "influencing" I mean "eviscerating." At least that's the overwrought take I get from a few of my more skittish E-mailers. Chillax, y'all!

Now a few of my own (more tranquil) observations about a possible jittery Investor Class, the plunging market, and the now famous Obama Discount Theory:

1) I find it hard to believe that fears about a deep recession are suddenly dawning upon investors and thus are solely responsible for kneecapping the market. I've been hearing such dire forecasts for weeks from top Wall Street economists, and I really think they're already baked into the cake. (And credit markets actually look like they are finally picking up a bit?a plus for stocks.) So with that perception locked in, maybe the future political landscape is finally playing a greater role in the minds of investors, especially with polls showing a possible landslide Obama win and big Democratic congressional majorities. Is it really more plausible to suggest no effect whatsoever from a possible once-a-generation, political sea change, especially one that moves away from the winning economic formula of the past 25 years ? Not even a smidgen of worry? C'mon, now.

2) Obama wants to raise capital gains taxes on a good chunk of the money currently in the market. Nearly 80 percent of total stock holdings are held by people who would be subjected to higher investment taxes. Not only does that hurt their future after-tax returns, but it also undercuts the future productivity of the economy, thus crimping the future stream of earnings generated by corporate America. So the whole stock market will suffer from a sort of collective tax punishment. Hey, even potential Obama Treasury secretary Jamie Dimon thinks raising taxes right now is a goofy idea.

3) Then there's the Joker Scenario, inspired by one of my favorite schemes concocted by the Clown Prince of Crime. It's the one where he poisons various toiletries like shampoo, deodorant, soap, and toothpaste. But only when used in combination are they deadly. Investors might not be worrying so much about a Democratic president, given the current one-way state of the polls, as they are about the combo of Obama + Nancy Pelosi + Harry Reid. And you can toss Charlie Rangel and Barney Frank into the mix as well. Recall what Frank said the other day: "Yes, I believe later on, there should be tax increases. Speaking personally, I think there are a lot of very rich people out there whom we can tax at a point down the road and recover some of this money." Look for Democrat proposals for a "millionaire's surtax" on top of the higher rates from repeal of the Bush tax cuts in 2009. Or how about this idea to do away with 401(k) plans. Maybe the risk of a deluge of ill-conceived ideas is apparently why, according to my pal Amity Shlaes, split power in D.C. produces an average 9 percent positive return for stocks vs. a negative 8 percent when one party holds Congress and the White House.

4) It's certainly true that recent polls have McCain with only a narrow lead, at best, over Obama among self-described members of the Investor Class. Yet I would hazard a guess that active investors are far more conservative?even libertarian?in their economics than the great mass that is 401(k) nation. (That sure has been my experience.) They are likely the ones selling hard right now.

5) Then there's the Great Experiment of 2009. In 1980, anxious Americans voted for lower taxes and smaller government as the solution to the nation's economic ills. Would the opposite prescription also have led to a 25-year economic boom? With Obamanomics, voters may be about to play a fascinating game of "what if." Except it's for real. When Goldman Sachs ran a sophisticated economic simulation of the effect of a total repeal of the Bush tax cuts, the computer predicted a 3 percentage-point drop in GDP. Maybe investors fear that with perhaps a trillion-dollar budget gap ahead, revenue-hungry Dems will raise taxes further than Team Obama is suggesting?right into the teeth of a weak economy. What if, indeed.

 

[Eeezee]

Originally posted by: winnar111
Depends on who is elected.

The last time we raised capital gains was 1987 and led to a market crash.

The last 2 times we cut capital gains in 1997 and 2003 led to market booms.

Great, so you have 1 data point for one set and 2 data points for the other. Those are some great statistics

That's 1 +- 1 and 2 +- 1.7

 

[mshan]

T. D. Ameritrade's "Enlightened Investor" magazine (fall 2008 edition):

The Strategist (page 20)

"But on the horizon are growing concerns over proposed changes to the current capital gains and dividend income tax rates, wich appear likely to rise regardless of who is in office."

"If we have a Democratic president and Congress, we'll probably see a higher capital gains tax, a higher top tax bracket and a lower estate-tax exemption, all of which could hurt the stock market. With a Republican in office, it still looks as though tax rates will go higher, but the estate-tax exemption could be a bit more favorable than under the Democrats. Regardless, any real impact from new tax policy won't be felt until late 2009 or 2010."

Stock market returns (chart on page 3):


Average Annual Returns:
- Democrat: 9.0%
- Republican: 5.8%

Cumulative Return on $10,000:
- Democrat: $315,449
- Republican: $73,536

Average Annual Returns (individual administrations):
- FDR 7.5%
- Truman 8.3%
- Eisenhower 10.9%
- Kennedy 6.5%
- LBJ 7.7%
- Nixon -3.9%
- Ford 10.8%
- Carter 6.9%
- Reagan 10.2%
- H. W. Bush 11.0%
- Clinton 15.2%
- George W Bush -0.8% (through 8/25/08)


(in reconciling average annual returns with the cumulative gain on $10,000 statistic above, I'm guessing that Republican administrations have represented giant boom and bust cycles where lots of money was made, lots of money was lost, but the net overall effect was simply transfer of wealth, rather than gains that hold significantly over time?)

 

[theeedude]

Obama victory is already priced in.

 

[nageov3t]

Originally posted by: Harvey

Originally posted by: loki8481

... just imagine what electing him will do for the economy.

I have, and I'm looking forward to it. :thumbsup:

The problems your Traitor In Chief and his criminal cabal have left us are so grave that there's no guarantee an Obama administration will be able to turn things around.

OTOH, if McCain is elected, I think we'd face certain further economic and financial catastrophy. More of McSame is exactly what this nation does NOT need. :thumbsdown:

hey, he's your traitor in chief too

 

[Ozoned]

Originally posted by: Eeezee
Be sure to specify which candidate you think will win and what the stock market will do in response. This is naturally a big event, and with such a volatile market who knows what might happen?

If the people put the right candidate in the office, the people that control the wealth in this country will put their money back to work. Its not a question of which candidate, it is a question of who controls the wealth.

 

[miketheidiot]

Originally posted by: winnar111
Depends on who is elected.

The last time we raised capital gains was 1987 and led to a market crash.

The last 2 times we cut capital gains in 1997 and 2003 led to market booms.

so what you are saying, is that cutting capital gains taxes causes retarded speculation and reinforced the boom/bust cycle.

 

[miketheidiot]

Originally posted by: ProfJohnIs it really more plausible to suggest no effect whatsoever from a possible once-a-generation, political sea change, especially one that moves away from the winning economic formula of the past 25 years ? Not even a smidgen of worry? C'mon, now.

what?