<p>The DJIA has gone up over 1.5% and the S&P 500 has gone up over 1.0% since Election night.</p>
<p>Why do the capitalists hate America?</p>
<p>I dont understand, that does not even mean anything. If you think that companies are purposely slowing down growth because of the elections, which I dont think is happening and no one else thinks its happening because its not in their incentives to not make money, maybe its because they are anticipating an increase in taxes. That would truly slow down growth</p>
<p>Better pay attention in math class. A 1% gain in eight days of trading works out to be an annualized gain of 36% and a 1.5% gain works out to be annualized gain of 59% (over a 250-day trading year). The point is that the markets have done very well since the election. </p>
<p>It’s a continuation of the rally that was occurring before the election. The market didn’t take the possibility of Democrats taking control of Congress before the election as bad news and they’re not selling off now that it is a reality. Effectively, Wall Street has had the same reaction as Hugo Chavez and the terrorists.</p>
<p>To be fair about it, the rally would have likely continued had the GOP retained control over one or both chambers. But the fact that the markets held up they way they did is certainly telling.</p>
<p>The market has done great since Bush has been President.</p>
<p>Right, but I do not understand your point. Why would companies work to not make money when democrats win.</p>
<p>Markets like stability. The runup is the result of the expectation that with a Republican president and Democratic congress, nothing will happen.</p>
<p>Well the democrats have not done anything yet, and ofcourse that will not change the market then. Its not like the communists were elected</p>
<p>Golani, it’s pretty clear you don’t understand much about how Wall Street works. Why not do some basic reading on the topic?</p>
<p>No offense, but it’s very hard to take you seriously when you say things like “Well the democrats have not done anything yet, and ofcourse that will not change the market then” or “Why would companies work to not make money when democrats win.” </p>
<p>The market doesn’t wait till something has happened to react to it; it’s all about the expectation of what will happen. Something like a president getting a bad medical checkup (even just a head cold) can have a noticeable effect on the market. Similarly, lower stock prices don’t mean that a “company is working not to make money.” </p>
<p>If investors are expecting a bad economy, especially one that will affect company X in particular, they are willing to pay less for stock, because they expect to earn less when they resell it or to earn less while they hold it. (Of course, resale value far and away trumps dividends to most investors).</p>
<p>I can’t make up my mind whether you are being disingenuous or whether you are really this out of the loop.</p>
<p>Right, I agree with you, but I do not understand your point. Investors and the such have not changed anything because there is nothing to anticipate yet. Like I said, its not like communists were elected. The dems do not take office till Jan 30th, i think, and from then there will be alot of time till things start to drastically change.</p>
<p>“The dems do not take office till Jan 30th, i think, and from then there will be alot of time till things start to drastically change.”</p>
<p>Sorry, hon, you’re still not getting it. The market is driven by both long and short term projections. If there was any reason to suspect that the election results were anything but good news, the market would have reacted already. It certainly wouldn’t have risen so much on the news of the Democrats’ victory.</p>
<p>ETA: You might feel that two or three months is “plenty time” to react to something, but that’s not how the market works. Why not learn more about it?</p>
<p>No I do get it. Their is just no reason to change anything right now even though the democrats are in power, one of the biggest reasons is that the President is still Repbublican. </p>
<p>I do not understand what you are saying because its only been two weeks since the elections, the economy has been going very strong for years already, and do you really think businesses want taxes raised and a higher minimum wage?</p>
<p>“I do not understand what you are saying because its only been two weeks since the elections.”</p>
<p>Again, this is why you should learn more about the topic. So you’ll understand why two-week old election results would affect the market.</p>
<p>Right, but its not like the communist party was elected.</p>
<p>Look if you are trying to say that the corporate and business world is happy the democrats were elected because the businesses want an increase in taxes and higher minimum wage then you are wrong.</p>
<p>If you are trying to say that democrats will not be a disaster for the economy then you are right. But why that is relevant I dont know, because its really a non-issue</p>
<p>“Look if you are trying to say that the corporate and business world is happy the democrats were elected because the businesses want an increase in taxes and higher minimum wage then you are wrong.”</p>
<p>Please point me to where I made that specific causal link. I made no such childish oversimplification. </p>
<p>Minimum wage and possible tax increases aside, there are plenty of reasons that investors would think the Democrats controlling Congress is a good thing. For one thing, we might stand a shot at staving off the economic disaster that our own Government Accounting Office warns is looming thanks to the heavy borrowing of the Republican years.</p>
<p>And if you don’t think that investors’ reaction to the mid-term elections is relevent, it’s another sign that you really don’t understand. It says more about you than about the elections.</p>
<p>You never made that specific casual link, in fact you made no link, which makes it hard for me to understand what you are trying to prove.</p>
<p>What I was saying was irrelevant was that the point that democrats wont be disastrous to the economy because no one disputes that.</p>
<p>Wouldn’t the market have gone down if investors thought that a Democratically-controlled Congress meant our nation was less secure from terrorism?</p>
<p>Yes, but because America has been secure for 5 years now, no one really things any big changes are occuring especially since this democratic victory was mostly moderate/“conservative” democrats elected to office as a rebuff on the war in Iraq, meanwhile the general conservatism of the country has not really changed, so aside from pushing a few things many are still supportive of the war on terror, the patriot act, and certain NSA programs.</p>
<p>“democrats wont be disastrous to the economy because no one disputes that.”</p>
<p>Really, what about all the people who insisted that if the Democrats win, the terrorists win too? Even that there will be attacks on American soil? Wouldn’t those things be bad for the economy? September 11th sure was.</p>
<p>If no one disputes that Democrats won’t be disastrous for the economy, it stands to reason that no one really believed that the above would come to pass. Or that they were too ignorant to see the link between terrorists harming America and the economy.</p>
<p>“in fact you made no link, which makes it hard for me to understand what you are trying to prove.”</p>
<p>Again, I can’t be responsible for what you don’t understand. I was “trying to prove” that your analysis of the stock market was uninformed. I don’t see how anyone can read your post #5 and think it was anything but uninformed.</p>
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<p><a href=“http://news.yahoo.com/s/ap/20061108/ap_on_bi_st_ma_re/wall_street[/url]”>http://news.yahoo.com/s/ap/20061108/ap_on_bi_st_ma_re/wall_street</a></p>
<p>It’s true that the economy is usually best when Congress and the President are of opposing parties. The check and balance usually works out better than the rubber stamp. It’s often said that one of the reason that the Clinton years were so good for the economy, resulting in the largest budget surplus in history, was this dynamic. Six years of the rubber stamp turned that into the largest budget deficit in history.</p>