Welcome to Wall Street Prez. Obama
Written by: Aaron Katsman | November 6, 2008
Well that didn’t take long. The love affair with President elect Obama, certainly didn’t reach Wall Street as the market suffered the worst drop ever after a presidential election. Yesterday the S&P 500 closed down 5.3%. I guess soaring rhetoric and calls for unity didn’t sway investors. It appears that investors don’t think that words about change and the fact that many new babies born in Kenya that were named Michelle and Barack, will actually cure an ailing economy.
Investors are waiting to see which Obama we are going to see. Will we get ‘Senator Obama’, who had one of the most liberal voting records in the Senate, or will we get the ‘campaign Obama’ who ran on a more moderate economic plan? If we get ‘campaign Obama’, then investors will be more at ease and the potential exists for a market rally. If we get ‘Senator Obama’ who will govern based on his liberal ideology, and have all the help he needs from Pelosi and Reid, they will form what I like to call the Bermuda Triangle ( i.e. they will spend and spend, and we will never see that money again, it will be lost). In such a scenario it would be tough for stocks to rally.
Wall Street is waiting to hear about the Obama economic plan, not rhetoric but specifics, and until we hear it, stocks may be in for a bumpy ride.
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Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.
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