In yesterday's post, I quoted a couple of articles speculating on how markets might react should the Republicans retake either the House or Senate majority in the 2010 midterms. This was my comment on the articles:
Today, the Dow Jones rebounded 274 points, leaving many analysts scratching their heads after the unrelenting doom and gloom of the past few weeks. CNBC preempted Jim Cramer's show to broadcast a one hour special analyzing the day's market action. In this excerpt Ron Insana echoes that sentiment:"I am reluctant to link longer term market behavior to any policy or partisan mix in Washington. I've not seen any studies that show a believable, statistically significant correlation between long term market direction and Republican, Democratic, or divided governments. That said - in the short term it is less important whether there really is a correlation so much as whether investors believe there is a correlation. My sense is that most investors believe the stock market will benefit from Republicans taking control of either the House or Senate in the fall. With that expectation, a rising market could very well be a self-fulfilling prophecy."
"All of a sudden there are some reports coming out saying the politicians are underestimating the possibility the Republicans take either one or both house of Congress. If that political uncertainty disappears and you get a Democratic President and a Republican Congress - that is the best combination for stock prices. It might also clear up the uncertainty that will allow corporations to hire people." - Ron Insana
Indeed it might. And like in the 2006 mid-terms - perhaps happy days will be here again (at least as far as the market is concerned).
The full unedited clip from CNBC is linked here.
Yes - Amanda Drury did, in fact, turn to the panel and ask "Double-D or not Double-D? What do you think?" I thought Insana was going to lose it.
Divided and Balanced.™
Now that is fair.
Now that is fair.