The Race Is On

The political landscape is starting to get exciting again.  This will be a great race.  It’s like a great chess match.  As foreign tension picked up, Barack Obama picked an experienced Joe Biden as his VP.  Today, John McCain countered by picking Sarah Palin as his running mate.  A move obviously to grab the female vote and potentially grab the unhappy Clinton supporters.  He also timed it perfectly by doing it a day after the Democratic National Convention wrapped up.  Amazingly enough, this was kept under wraps quite well.  Nobody seemed to know this and it came out of left field.  But, how will it affect the stock market?  That’s what I get asked all the time. 

I don’t think the election will affect the market at all in the short run.  I think educated investors know that both candidates are saying and doing anything to get votes.  They’ve been flip flopping on several issues and saying what everyone wants hear.  I believe whoever gets into office might be paralyzed to get anything significant done.  Given this, I don’t think the market will move big in any direction based on the election.

The market is moving on fundamentals and temporarily on emotions.  This week, we saw low volume with some very volatile days which wasn’t a big surprise .  We could go up for a few days but I’ll be looking to short more if we do go up based on the weak internals I’m seeing. 

Since Tuesday, we have had over 30 pieces of economic data come out!  Some was good and some was bad.  What I took out of it was that personal spending was down (see Dell’s earnings) and personal saving was up.  So, it looks like maybe those stimulus checks which were supposed to get the economy going went into savings accounts.  So, we’ll continue to see weak economic data come out over the next few months.  Combine this with weak demand for stocks and I think stocks will continue to drift lower, potentially making new lows.

I hope you all have a great Labor Day!  I’ll be back Tuesday.

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1 Response to “The Race Is On”


  1. 1 Mary September 2, 2008 at 8:28 am

    Karl,

    Have you been stopped out of TWM and SKF? Just like 2006, market is up very strong after labor day. Are the foreigners coming?


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