I respectfully think otherwise. If one examines the time period from the '53 inauguration to the '55 inauguration of House and Senate members (this period being the only 2 year period Republicans controlled the Presidency, U.S. House, and U.S. Senate in the last 50 years... and before that, I dont think since the 1800's), the trajectory of the bull run in the markets is nearly unparalleled, with the Dow DOUBLING during these 2 years.
Republicans will restrain fiscal economic stimulus, which will allow Greenspan to apply monetary stimulus (i.e. lower s-t rates), improving near-term earnings outlooks. Republicans will lower individual income tax rates, easing rising wage pressures, resulting in improved margins. They will also no doubt look to provide relief on corporate tax rates, yielding immediate bottom line improvement in an market environment that is gasping for more earnings growth. Republicans also favor personal control of a portion of social security funds, which will inject mammoth amounts of liquidity into the market. And finally, Republicans will take giant leaps towards eliminating the public debt, which will suppress the mid and long end of the yield curve, which makes corporate earnings streams more valuable when discounted with lower rates.
Surely everyone here saw the futures free-fall 50 S&P points when the FSC decision favoring Gore was released on Friday. That's a 3.6% clock cleaning in the general market with an adjustment in the odds of GwhORE winning. If the market were to ever discount the SURE prospect of a Gore win, leveraged long players may need to see Lucretius for a loan to cover margin calls <g>. |
