- Apr 1, 2011
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Suck on it, Dims!
What is the stock market telling us about the November election?
Despite the fact that America currently has over 38 million unemployed workers, the market is down 8.5% this year, having gone up 32% since the late March low. Why is the stock market going up while our economy teeters on the edge of a Great Depression?
There are several factors currently at work in the market with the most obvious being the extraordinary intervention by our leaders in Washington. Congress has authorized mind-boggling amounts of stimulus funds while the Fed has signaled that it is ready to purchase nearly anything and mostly everything. Even more spending and buying are sure to follow. This money flood is so massive that undoubtedly there are mind-boggling sums going into equities.
Washington's interventions in the markets has had a calming effect on prices and volatility, allowing investors to begin to look ahead to November, where it seems that President Trump is ever more likely to win re-election. There are several key reasons why more and more voters are beginning to lean toward Trump. Prior to the Pandemic Lockdown, America was enjoying a tremendous economy, which many voters attributed to Trump's pro-growth policies, such as cutting taxes and reducing regulations. As bad as current economic conditions are now, people are beginning to hope that perhaps the worst has passed. The economy is starting to be perceived as poised to improve rather than worsen, certainly a trend that greatly favors Trump.
