Mark Hulbert: The Market Has Risen Every Third Year of a Presidential Cycle Since 1932
"Whatever political party holds the white house wants to get re-elected. So it’s going to do whatever it can to make the economy look good on election day"
This is how I see things as well. The question, of course, is how successful the Obama Administration will be in getting its way with the new Congress full of freshly minted Republicans. As I indicated in November, Obama will tack to the center to head off a challenge from the right by Republicans. In November, I predicted a few themes for Obama’s politics:
- No Foreclosure moratoria or bank holidays.
- Re-instituting the Bush tax cuts.
- Discretionary spending will be cut.
- Defense spending will be spared.
- Offering up Social Security and Medicare as Sacrificial Lambs.
- Social agenda items are dead.
When the President gives his state of the union address, we will get a better indication as to how accurate these predictions are. So far, the administration is moving in this direction. Is this good for the markets? We’ll soon find out. But the economic data are certainly bullish of late. The ADP report showed a near 300,000 gain in private sector jobs this morning. Regardless of your longer-term forecasts, you have to see the recent data as bullish for the economy over the short-term.
As for the markets, the Wall Street Journal video below features Hulbert making the quote I started with. He has much more to say as well. The clip runs just over three minutes.