The View From 1776
Monday, November 09, 2009
If Obama Is So Bad, Why Are the Markets Up?
Perhaps most important is what the lack of major legislation is telling markets. They don’t so much want presidents of either party to fail, as gridlock in Washington is generally good for stocks. Last spring it was to some degree felt that Obama’s rhetorical gifts would allow him to push all manner of anti-growth legislation through Congress. As noted above, none so far has come to pass, which means we’re experiencing a relief rally over Obama’s legislative skills not living up to their earlier billing.
Markets also serve us best for pricing in the future, and with pundits suggesting that Republicans will achieve House and Senate gains in the 2010 elections, stocks are likely pricing in future policy moderation out of Washington thanks to more pushback from an emboldened GOP minority.