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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: FastC6 who wrote (31871)	8/23/2000 11:04:34 PM
From: puborectalis	Respond to of 769667

Politics and Wall Street Which candidate is best for your portfolio? By Frank Cappiello, CBS.MarketWatch.com Last Update: 12:57 PM ET Aug 23, 2000 NewsWatch Latest headlines NEW YORK (CBS.MW) -- Wall Street's focus is now shifting from the Federal Reserve to politics. What is now known is that the Federal Reserve's rate policy will be on hold for the rest of the year. The benchmark Fed funds rate at the end of December will be the same as it is today: 6.5 percent. What is still unknown is the next president's identity. Myth has it that most of Wall Street is conservative and, accordingly, favors the Republican Party. The fact is that, historically, the stock market does better when the Democrats are in power. Further, since World War II, the stock market has tended to underperform in years with a single-party majority in the government (that is, House and Senate majorities and a president of the same party). Most recently (since 1990), the stock market, like the voting population, seems to enjoy "gridlock" -- a president of one party and a Congress controlled by the other. Apparently, Americans like the additional checks and balances beyond those outlined in the Constitution and incremental rather than sweeping political change. With the U.S. budget surplus growing, and the probability of large spending programs or big tax cuts, we believe that the stock market would again prefer mixed results in November; that is a president of one party and Congress controlled by the other. The answer to the question of which president would be best for the country continues to be debated. On the other hand, which president would be best for Wall Street depends on the stock groups you own or are planning to own. Bush would be boon to defense companies A Bush presidency would favor spending more on aerospace and defense. That's a plus for United Technologies (UTX: news, msgs), among others. The energy sector would also benefit, particularly oil drilling, and the health-care sector (drugs, HMOs) would feel less threatened by new regulation. Two specific stock beneficiaries would be Microsoft (MSFT: news, msgs) and Philip Morris (MO: news, msgs). Under Bush, the "new" Justice Department could be more amenable to an easier Microsoft settlement. Philip Morris would benefit on the basis of the same rationale. Finally, a Bush administration would cut taxes thereby placing more discretionary income in the hands of the consumer to spend (retail stocks) or save (financial stocks). Gore would be boon to environmental stocks A Gore administration will be tougher on energy. It would place increased pressure on the health-care companies, particularly in the prescription and Medicare arena. Further, environmental stocks would see sales and earnings climb as the Gore administration pursues its environmental goals. More importantly, one of the duties of the new president will be the ability to swing the Supreme Court majority to conservatism or keep it moderately liberal, since there will be a high probability that the White House will appoint two and possibly three new Supreme Court justices during the next four-year term.