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Romney vs Obama vs You – How the U.S. Presidential election results will impact your investment portfolio
By James McDonald | October 31st, 2012 12:10 AM EST | posted in CIO Letters, Conservative Strategy Insights, Custom Strategy Insights, Growth Strategy Insights, Press Releases, Spotlight, U.S. SectorsPREPARING YOUR INVESTMENTS FOR UNCERTAINTY
Consistently successful investment strategies require thoughtfully developed tactics to achieve investor’s financial goals under different economic scenarios. With only 1 week remaining before we elect the next commander in chief, uncertainty is the most important scenario to be considered by investors who expect successful investment results.
As we approach the November 6th U.S. Presidential election, among other factors, there are both known and unknown economic risks, and opportunities, that will impact your portfolio in 2013. The greatest unknown factor is whether it will be Barack Obama or Mitt Romney who will lead the country through the economic obstacle course ahead.
With that uncertainty in mind, I took this opportunity to share Index Strategy Advisors view of the potential outcomes you can most likely expect. The analysis below will help you to reconsider how your portfolio can be positioned to succeed in spite of any meaningful differences between a Romney or Obama administration.
THE ECONOMY CONNECTS POLITICS TO YOUR INVESTMENTS
The economy has a major influence on the success of your investment strategy and upon elections. Historically, the four most influential economic factors on elections are GDP growth, the inflation rate, unemployment, and consumer sentiment. Predicting a winner in presidential elections can range from nearly impossible to easy depending on circumstances, yet we can see which factors have been associated with all the winning and losing presidential bids since 1968.
Based on history, Obama’s record offers little predictive value as to a potential winner
- Preparing your investments for the uncertainty of this election would be simpler if Romney or Obama was a clear favorite, but that is not the case as of this writing. By comparing Obama’s record to the past historical data, he is neither favored to win, nor likely to lose since high unemployment is the only factor which stands out for the Obama administration.
- Historically, a candidate running with at least two gray numbers, indicating poor performance in these areas has always lost the election (Gerald Ford in 1976, Jimmy Carter in 1980, George H.W. Bush in 1992, and John McCain in 2008). Additionally, in elections where the incumbent or his successor has run with two or more blue or black numbers, indicating neutral or positive performance, has always led to a win (Richard Nixon in 1972, George H.W. Bush in 1988 and Bill Clinton in 1996), with the exception being Hubert Humphrey in 1968.
THE FOUR RISK FACTORS THAT MATTER MOST TO YOUR INVESTMENTS FOR ELECTION 2012
With no clear favorite to win the Presidency, we must focus on the economic factors most likely to impact your investments regardless of the winner:
RISK FACTOR #1: SLUGGISH ECONOMIC GROWTH
In 2013, the newly sworn in President will face a sluggish economy, growing at a paltry rate of 2 percent or less. For over 30 years, GDP growth and stock market performance have consistently moved in tandem in the U.S., and throughout the developed economies of the world. Stock market losses have been dramatic when GDP growth dips below 2% throughout this period. Stronger economic growth will be necessary to grow your investments.
Romney’s reputation as a successful entrepreneur and his selection of budget expert Paul Ryan make him a better candidate for your investment portfolio for the sluggish economic growth risk factor.
- Economic growth starts with investment by companies. In the pre-election environment many companies are being tightfisted with their budgets. The Institute for Supply Management (ISM) report on manufacturers released on September 4th showed increased hesitation on spending and investing. The new orders index edged down 0.9 point to 47.1 (see chart below), indicating a contraction in new order flows.
- If Romney wins the election, we predict that a slight uptick in business confidence can be expected due to his stated intentions to reduce corporate taxes. Additionally, his V.P. Paul Ryan is perceived by many in the business community to have a feasible economic budget to address the Federal deficit. An uptick in business confidence would counteract the potential risk of a sustained market pullback if businesses responded unfavorably to the re-election of Obama.
RISK FACTOR#2: THE FISCAL CLIFF
The fiscal cliff refers to a variety of deficit-reduction measures that would increase taxes and reduce federal spending at the end of this year. If enacted in full, the combined tax increases and spending cuts are expected to cut the federal budget deficit by $607 billion in 2013.
The measures would also result in an estimated 4% reduction of U.S. gross domestic product (GDP) according to a Congressional Budget Office (CBO) report on August 22, which some economists characterize as “falling off a cliff.” Under those fiscal conditions, which will occur under current law, growth in real (inflation-adjusted) GDP in calendar year 2013 will be just 0.5 percent, CBO expects—with real GDP declining by 0.5 percent between the fourth quarter of 2012 and the fourth quarter of 2013 and the unemployment rate rising to about 9 percent in the second half of calendar year 2013.
Given the pattern of past recessions as identified by the National Bureau of Economic Research, such a contraction in output in the first half of 2013 would probably be judged to be a recession.
Both Romney and Obama would work to see that Congress rescinds the tax increases and spending cuts, therefore neither candidate is better for your investments for this risk factor.
- In our view, neither candidate would be willing to risk the political backlash that would result from allowing the pending tax increases to come into effect, as this could prompt a sharp decline in the economy and a substantial loss of jobs. Therefore, the fiscal cliff risk to your investments is not tied to the election outcome.
A protracted political debate over entitlements will likely result in greater risk to your investments
- There is substantial political risk involved in the fact that a Congressional act to lift the spending cuts and tax increases would involve protracted political debate. This risk has severely damaged investment returns recently on the two occasions when major legislation was required to avert financial crises. It should be reiterated that this risk has been true for both political parties (e.g. Bush and the bailout vote in October ’08 and Obama and the Budget Control Act, a result of the summer 2011 debt ceiling debate).
The Obama Administration will bear a significant degree of criticism throughout any congressional move to lift the spending cuts and tax increases.
- We believe that neither party will bankrupt the nation however the desire to influence public opinion and extend political posturing could hurt investors dearly. Until the actual Congressional act is passed to reverse the fiscal cliff measures, a focused dynamic risk hedging approach should be applied to protect capital from the volatility, uncertainty, and historical losses associated with delayed legislative action.
RISK FACTOR #3. TAX CUTS EXPIRING
If no action is taken by Jan. 3, 2012 temporary tax cuts expire and deep, across-the-board spending reductions kick in automatically. Both Romney and Obama will expect Congress to enact a short-term solution to the expiring tax cuts, extending them for at least one more year. A failure to act would result in a $4 to $5 trillion tax increase over the next 10 years. However, Congress could reinstate tax increases later in 2013 and make those increases retroactive to January. The obvious implications to your investment strategy are the increased taxes that would be applied to capital gains, dividends, and personal income.
Without action from Congress, all income, capital gains, dividend and estate taxes will increase along with the first tax increases associated with health care reform.
Both Romney and Obama would work to see that Congress rescinds the tax increases and spending cuts, therefore neither candidate would have a meaningfully different impact upon your investment strategy for the expiring tax cuts risk factor.
- However, if Congress does not rescind the tax increases and Romney wins, his primary asset of job and business friendly initiatives will lose its potency. Whereas Obama’s key areas of interest (social programs) will not be disproportionately hurt by a failure to lift the tax increases, Romney would have to scramble to find a ‘narrative’ to define his economic agenda. This scenario would pose additional risk to your investment strategy as a theoretical vacuum would exist in terms of policy or agenda options for a Romney administration.
FACTOR #4: UNEMPLOYMENT
Despite 30 months of private-sector job growth under President Obama’s current term, the US still confronts a large jobs deficit. Additionally, the unemployment rate remains more than two percentage points above the “normal” rate (when the economy is operating near capacity). The issue of joblessness is even worse when the millions of Americans who have dropped out of the labor force are factored into the equation.
In a historical perspective, the labor-force participation rate remains near historic lows. The challenge facing Romney or Obama in 2013 is that more than 11 million additional jobs are needed to return the US to its pre-recession employment level. At the current pace of recovery, that is more than eight years away. In its recent announcement to extend Operation Twist (aka “QE3”) for another two years, the FOMC has forecasted that its measures may lead to a continued reduction in civilian unemployment as seen below.
Just as with Factor #1 (Sluggish Growth), unemployment is an issue that has business owner’s outlook as its primary driver. In this context, Romney for the same reasons as in Factor #1 is the preferred candidate.
- Based on the FOMC’s forecasts and current policy, the employment picture may improve. However, Romney has suggested a different Fed chairman and policy approach would be part of his administrations agenda. This uncertainty clouds any speculation as to how the current monetary policy and its predicted implications would help or hurt your investment strategy.
OBAMA VERSUS ROMNEY VERSUS YOUR INVESTMENT PORTFOLIO
What you should do now
It’s unlikely that Congress will act on the provisions contributing to the fiscal cliff until after the presidential election in November. Politician’s willingness to debate until the final hour while markets sink to the brink of collapse (as seen in 2011 and 2008) should remind you that a prudent risk management system should be in place for your portfolio before the election if you want to avoid or reduce potentially significant market losses.
Obama vs. Romney
- The range of economic-policy initiatives that are both feasible and desirable are extremely limited, thus major differences between Romney and Obama are limited.
- The winner on November 8 will quickly recognize that in reality there are far fewer options for the right mix of policy reforms than his campaign doctrines suggested. In this way the differences in impact to your investment portfolio certainly are not an either/or proposition.
- The fiscal reforms required to lift the impediments to growth and job creation are prone to excessive political polarization and thus encounter major hurdles in Congress. Markets have historically collapsed during such periods.
THE BOTTOM LINE
This election boils down to diverging philosophical ideas about social and, perhaps, moral issues. As important and polarizing as they may be, however, the majority of social issues which evoke emotion and partisanship, in our estimation, will have little impact to your investment strategy solely based upon the winner of the election.
In plain English, how much tax payers will be willing to ‘help’ each other appears to be the divide between Obama and Romney that will matter the most to your investment portfolio. And it won’t matter as much based on what’s coming in the future or who will sit in the West Wing, it will matter based on how quickly Congress acts to address mistakes from the past.
Much of the debate amongst followers of either party seems to persist around the issues of fairness and social responsibility however, both parties have consistently demonstrated a lack of fairness or responsibility to investors. We have seen markets nosedive repeatedly in passing legislation to fix (or extend) broken budgets. This time is not likely to be different therefore we recommend a defensive stance and review of sound risk management practices for the entirety of your investment portfolio.
Oil moved slightly higher yesterday however remained below 87.00, while the bearish head and shoulders pattern continues to be valid, supported by the negativity from stochastic. Therefore, we maintain our expectations for an intraday bearish move for today, taking into consideration that a break below 86.10 and stability below 87.70 are required for the suggested scenario.
The trading range for today is expected among the major support at 82.00 and the major resistance at 87.70.
The short-trend trend is to the upside with steady weekly closing above 78.00, targeting 104.65 and 110.55.
Support: 86.10, 85.00, 84.50, 84.00, 83.20
Resistance: 87.00, 87.70, 88.30, 89.00, 89.65
Recommendation Based on the charts and explanations above, we recommend selling oil with four-hour closing below 86.10 targeting 84.50 and 83.00. Stop loss with four-hour closing above 87.70.
The trading range for today is expected among the major support at 82.00 and the major resistance at 87.70.
The short-trend trend is to the upside with steady weekly closing above 78.00, targeting 104.65 and 110.55.
Support: 86.10, 85.00, 84.50, 84.00, 83.20
Resistance: 87.00, 87.70, 88.30, 89.00, 89.65
Recommendation Based on the charts and explanations above, we recommend selling oil with four-hour closing below 86.10 targeting 84.50 and 83.00. Stop loss with four-hour closing above 87.70.
Oil N' Gold Focus Reports
| Weekly Fundamentals - Commodities Fell Despite Encouraging Job Data |  |
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| ONG Focus | Insights | Written by Oil N' Gold | Sat Nov 03 12 04:52 ET |
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Profit-taking was seen on Friday after stronger-than-expected US non-farm payrolls. While improved job market data might signal better economic outlook in the world’s largest economy, investors remained cautious about the aftermath of Hurricane Sandy and decided to take profit after rallies earlier in the day. In the commodity sector, crude oil prices slumped amid concerns that refinery shut down due to the hurricane would increase supply. It’s expected that oil inventory would show a huge build in the report next week. Gold also plummeted after the employment report as improved job market might lower the urgency of further Fed easing. The US employment report for October beat market expectations. The number of non-farm payrolls increased +171K last months, compared with the upwardly revised +148K addition in September. The august number was also revised higher to 192K from +142K. The unemployment rate climbed modestly higher to 7.9% from 7.8% a month ago as the labor force participation rate increased from 63.6% to 63.8%. The employment-to-population ratio also rose from 58.7% to 58.8%. For the coming week, the RBA would be meeting on Tuesday. While the central bank has not yet ended its easing cycle, it would probably pause in November as the latest inflation data surprised to the upside. The ECB and the BOE would also leave the monetary stances unchanged in November. 
Energies: Hurricane Sandy likely has done some noticeable damage on the US oil market in terms of both supply and demand. The Colonial pipeline, a critical pipeline in the Northeastern region bringing gasoline, diesel, heating oil and jet fuel from US Gulf coast refiners to the east coast market, remained offline. On the demand side, PADD I is a oil consuming hub, representing 40% of total US demand for gasoline and jet fuel, as well as 30% of total US distillate demand and 29% of total US oil demand. Closure of companies, businesses and transportation infrastructures has both affected the demand and supply of mainly oil products. 
Concerning natural gas, the DOE/EIA reported that natural gas storage rose +65 bcf to 3 908 bcf in the week ended October 26. Stocks were +136 bcf higher than the same period last year and +259 bcf above the 5-year average of 3 649 bcf. Separately, Baker Hughes reported that the number of gas rigs rose +8 units to 424 in the week ended November 2. Oil rigs decreased -35 unit to 1 373 and miscellaneous rigs added +1 unit and the total number of rigs slipped -26 units to 1 800. Directionally oriented combined oil, gas, and miscellaneous rigs dropped -14 units to 195 units while horizontal rigs stayed unchanged at 1 105 and vertical rigs dropped -12 units to 500 during the week. 
Precious Metals: Gold has once again entered its range-bound trading period as it lacks catalyst in the near-term. In fact, the near-term outlook should be mildly negative for gold. After he US presidential election next week, the focus would be turned to the fiscal cliff which signals that expiration of the Bush era tax holiday and automatic reduction in government expense in the beginning of 2013, the US fiscal deficit would narrow but economic activities would weaken. Meanwhile, renewed concerns were seen in the sovereign debt crisis in the Eurozone as Spanish economy deteriorated further and a Greek court ruled that certain conditions (the pension reform plan) of the Greek bailout were unconstitutional. These may dampen risk appetite and affect gold investment. Yet, the floor of 1700/oz appears to be firm and buying interest should emerge as price falls below that level. While gold and silver dropped -2.14% and -3.68% respectively last week, PGMs were better off with platinum losing just -0.07% and palladium gaining +0.71%. We believe the relative outperformance in PGMs was due to continued labor-related tension in South Africa. According to Anglo American Platinum, the largest platinum producer, some striking workers have returned to work. Yet, the number was not sufficient for operation to be back to normal. Moreover, the company said it was losing an average of 3 694 oz of platinum per day and the strike since 7 weeks ago has resulted in a loss of 141,640 oz. |
U.S. President Barack Obama
U.S. President Barack Obama speaks in a campaign rally in Las Vegas
Ahead of the U.S. presidential election on Tuesday, here are key facts about Obama, the nation's first black president.
- Barack Obama has a personal background like no other president in U.S. history. His mother, Ann Dunham, was a white woman from Kansas and his father, Barack Obama Sr., was a black Kenyan who saw little of his son after a divorce when the boy was a toddler. Obama spent much of his childhood in Indonesia and then Hawaii, where he lived with his maternal grandparents.
- Obama struggled with his mixed racial background while growing up, writing in a memoir that he wondered " if something was wrong with me." He also was troubled by the absence of his father, who he considered a " myth," and said that may have contributed to him using marijuana and cocaine in his youth.
- Obama graduated from New York's Columbia University in 1983 and then worked in the business sector in New York and for a Chicago community group. In 1988 he went to Harvard Law School, where he became the first black president of the prestigious Harvard Law Review.
- Obama's relationship with Congress is not great. Even when Democrats controlled the House of Representatives and the Senate, Republicans often stymied his initiatives. The situation became more difficult when tax-averse Republicans took over in the House in 2010.
- In the early 1990s Obama worked in a voter registration campaign in Chicago, taught constitutional law at the University of Chicago and joined a law firm that specialized in civil rights and neighborhood development. He married Michelle Robinson, who he met at a law firm when he was an intern and she was assigned to be his adviser.
- In his rare spare moments, the lanky Obama pursues his lifelong love of basketball with semi-regular games at an FBI gym. He also makes time for school functions and sports events of daughters Sasha and Malia and tries to get out for an occasional " date night" with his wife.
- Obama's political career began with election to the Illinois State Senate in 1996 and soared in 2004 when he gave a rousing keynote address at the Democratic National Convention. In November of that year he was elected to the U.S. Senate.
- Obama won the 2008 Democratic presidential nomination by defeating Hilary Clinton, the former first lady and New York senator, and then took the presidency by beating Republican Senator John McCain. His energetic campaign was built on a theme of " hope and change" fueled by powerful oratory.
- A mood of national optimism prevailed at Obama's Jan. 20, 2009, inauguration, which drew an estimated 1.8 million people to the National Mall in Washington despite bitter cold. He began his presidency with a 68 percent approval rating.
- Obama simultaneously oversaw wars in Iraq, which he ended in 2011, and Afghanistan, as well as the U.S. military involvement in Libya that helped oust Muammar Gaddafi. In May 2011 he authorized the raid in which U.S. Navy SEALS killed al Qaeda leader Osama bin Laden in Pakistan - a triumph he points to as indicative of a strong national security policy.
- Obama inherited an economic crisis so persistent that it remains a threat to his re-election. Almost 800,000 jobs were lost the month he took over. In the early days of his administration, he pushed through an $831 billion economic stimulus package and renewed loans to automakers, even making the government a temporary part-owner of General Motors.
- The centerpiece of his domestic agenda was the Affordable Care Act, the healthcare reform law better known as Obamacare. Its purpose is to give all Americans affordable insurance and more protections but critics say it is expensive federal interference. A key aspect of the reform - requiring most Americans to get insurance or pay a penalty - survived a 2012 U.S. Supreme Court challenge.
- Obama has a reputation as a charming communicator but he also is criticized for being aloof and not building better relationships with congressional leaders. Some have questioned his preparation skills, especially after a sub-par performance in a presidential debate with Republican opponent Mitt Romney. (Writing by Bill Trott Editing by David Storey and Eric Walsh)
[Trading Central] Straits Times MT: range.
02 Nov 2012 17:40
Update on supports and resistances.
| Short Term View (Rise, Limited Rise, Consolidation, Limited Decline, Decline) |
Limited Decline |
|---|---|
| Change In Short Term View | None |
| Medium Term View (Bullish, Range, Bearish) |
Range |
| Change In Medium Term View | None |
Pivot: 2978.
Our preference: Above 2978 look for further advance to 3110 and 3210 in extension.
Alternative scenario: Below 2978, expect a new weakness to 2940 2860.
Comment: the RSI is mixed, calling for caution.
Trend: ST Ltd Downside MT Range, we have been neutral since 12 OCT 2012 (3046).
Key levels Comment
3285 ** Horizontal resistance
3210 ** Horizontal resistance
3110 ** Horizontal resistance
3040 Last
2978 *** Pivot point
2940 *** Horizontal support
2900 *** Horizontal support
Copyright 1999 - 2012 TRADING CENTRAL
Click to view chart in actual size.
Wall St ends storm-shortened week with a selloff
The New York Stock Exchange building
* U.S. employers hire more in October than expected
* Energy lags, Chevron drags Dow lower
* Starbucks raises outlook, U.S. sales beat expectations
By Chuck Mikolajczak
NEW YORK, Nov 2 (Reuters) - U.S. stocks ended an unusual storm-shortened trading week with a selloff on Friday, as major indexes erased early gains sparked by a stronger-than-expected payrolls report.
Energy stocks were a drag on the market after Chevron Corp , the second-largest U.S. oil company, posted a profit that missed expectations. The stock fell 2.9 percent to $108.26 and was one of the biggest drags on the Dow industrials.
The dollar's strength also hurt energy and materials shares. Eventually, all 10 S& P 500 sectors succumbed to selling pressure to end lower.
For the week, the Dow shed 0.1 percent, but the S& P 500 gained 0.2 percent. The Nasdaq ended the week down 0.2 percent.
The trading week was shortened by a historic two-day market closure on Monday and Tuesday, spurred by superstorm Sandy's devastating sweep through the U.S. Northeast.
" We started off on strength, with nonfarm payrolls coming in above expectations. Then we drifted lower during the day. It's hard to determine what direction we are in - with the two days off, it's really been a strange week," said Fred Dickson, chief market strategist at D.A. Davidson & Co, in Lake Oswego, Oregon.
From New York City's Staten Island to the popular beach towns of the Jersey Shore, rescuers and officials continued on Friday to face widespread destruction wrought by Sandy, as well as a rising death toll and frustration over delayed relief and fuel shortages.
Government data showed employers added 171,000 people to their payrolls last month, topping expectations. The jobless rate ticked up to 7.9 percent as more workers restarted job searches, a positive signal for the economy.
The jobs report is the last one before the U.S. presidential election on Tuesday, and it could improve President Barack Obama's odds at the ballot box, though polls continue to indicate a close race between Obama and Republican candidate Mitt Romney.
Chevron also was the second-largest weight on the S& P 500. The S& P energy index, down 1.7 percent, was one of the worst performers among the 10 major S& P 500 sector indexes. Strength in the dollar was also cited for a decline in crude prices, which hurt energy shares as well.
The S& P materials index fell 2 percent, pulled lower by a slide of 8.4 percent in Newmont Mining Corp to $48.74 after its profits missed expectations.
According to Thomson Reuters data through Friday, of the 378 companies in the S& P 500 that have reported earnings so far, 61.9 percent have topped expectations, in line with the 62 percent quarterly average since 1994.
The revenue picture is much bleaker, with only 38.2 percent of companies having posted revenue above expectations, well below the 62 percent quarterly average since 2002 and the 55 percent average over the past four quarters.
" Generally, we've seen the market trend lower, primarily related to disappointing revenue reports coming out of the third-quarter earnings stream," Dickson said.
The Dow Jones industrial average dropped 139.46 points, or 1.05 percent, to 13,093.16. The Standard & Poor's 500 Index lost 13.39 points, or 0.94 percent, to 1,414.20. The Nasdaq Composite Index declined 37.93 points, or 1.26 percent, to close at 2,982.13.
The S& P 500 index is down 3.5 percent from a recent peak on Sept. 14, and is below its 50-day moving average, amid investor caution ahead of the election and tough government budget negotiations at the end of the year.
Starbucks Corp jumped 9.1 percent to $50.84 after raising its profit forecast for the fiscal year as sales in the United States, its top market, beat expectations, providing the company optimism that has eluded much of the U.S. restaurant industry in recent months.
Restoration Hardware shares soared 29.6 percent to $31.10 in their market debut after the upscale furniture retailer's initial public offering was priced at the high end of the expected range. The shares hit an intraday high at $33.15 - up 38.1 percent from the IPO price of $24.
Verizon said it expected fourth-quarter results to be hurt significantly due to superstorm Sandy, but could not estimate the effect at this time. The stock slid 1.4 percent to$44.52.
Volume was modest, with about 6.35 billion shares traded on the New York Stock Exchange, NYSE MKT and Nasdaq, slightly below the daily average of 6.5 billion for the year so far.
Declining stocks outnumbered advancing ones on the NYSE by a ratio of 7 to 3, while on the Nasdaq, about three stocks fell for every one that rose.
Here Comes UK Manufacturing PMI...
Sony Pictures
UK's October manufacturing PMI will be released at 5:30 AM EST.
Click here for updates >
This will be an interesting report, because last week, the UK reported that GDP in Q3 grew at the fastest pace in 5-years.
The Results
UK's manufacturing PMI fell to 47.5 in October, missing expectations for 48.0
Read more: http://www.businessinsider.com/uk-manufacturing-pmi-2012-11#ixzz2AxgpkjL4
LIVE: The World's Biggest Countries Are Revealing The Truth About The Economy
HEADS UP: The world's biggest economies will release their October manufacturing PMI reports over the next two days, and this is our scorecard.
Day one includes reports from the major Asian and American economies, as well as Greece.
Overall, PMI figures improved in October, including China.
One notable loser was Japan. However, this could be due to an ongoing row with China.
Earlier, we learned that China's official manufacturing PMI climbed to 50.2 in October, which was right in line with expectations.
The unofficial HSBC China PMI jumped to an 8-month high of 49.5, which was better than the 49.1 Flash number.
At the beginning of each month, Markit, HSBC, RBC, JP Morgan and several other major data gathering institutions publish the latest local readings of the manufacturing purchasing managers index (PMI) for countries around the world.
PMI is one of the best leading indicators of the economy.
Each reading is based on surveys of hundreds of companies. Read more about it at Markit.
These are not the most closely followed data points. However, the power of the insights is unparalleled. Jim O'Neill, Chairman of Goldman Sachs Asset Management, believes the PMI numbers are among the most reliable economic indicators in the world. BlackRock's Russ Koesterich thinks it's one of the most underrated indicators.
Click here to refresh this page for the latest updates to our scorecard >
How The Markets And The Economy Performed For Every President Since 1900
With the presidential election just a few days away, I thought this might be a good time to recall the larger historical context of the US economy and markets with an eye on the party in power.
First up, here is a look at GDP by party in control of the White House and Congress. Since the inception of quarterly GDP in 1947, Real Quarterly GDP has averaged 4.0 percent during Democratic administrations and 2.6 percent during Republican administrations.
Recessions are highlighted in gray.
With the presidential election just a few days away, I thought this might be a good time to recall the larger historical context of the US economy and markets with an eye on the party in power.
First up, here is a look at GDP by party in control of the White House and Congress. Since the inception of quarterly GDP in 1947, Real Quarterly GDP has averaged 4.0 percent during Democratic administrations and 2.6 percent during Republican administrations.
Recessions are highlighted in gray.
If we switch to annual GDP, here is a look from 1930 through 2011.
What about the market? Here is a snapshot of the Dow Jones Industrial Averages since 1900. For the past 112 years, the average annual gain (excluding dividends) is 5.7% for Republicans and 8.7% for Democrats. (The 2012 Dow performance for Obama is through October 26th.)
Here is a snapshot of Debt-to-GDP and presidential politics:
And finally, with Bush tax cuts set to expire, here is a look at the complete history of Federal Tax Brackets.
Naturally, when the party in control of the White House changes, there is an inheritance factor from the previous administration. Nevertheless, the charts above offer some context for the rhetoric of an election year.
Read more: http://advisorperspectives.com/dshort/updates/Politics-the-Economy-and-the-Market-Across-Time.php#ixzz2AxeZx2GH
Here Comes An Economic Data Deluge Like Nothing We've Ever Seen
It's November 1 and it's already been an extraordinary month for economic data. All night, manufacturing PMI reports coming out of the world's largest economies.
But the data dump is only beginning thanks to delays caused by Hurricane Sandy.
Here's what to expect from the U.S.
7:30 AM: Challenger, Gray & Christmas Layoffs
This one could be ugly given the wave of big layoff announcements from companies like AMD, Dow Chemical, and Dupont.
8:15 AM: ADP Employment
This report was originally supposed to come out on Wednesday, but was delayed because of Hurricane Sandy. Economists estimate private companies added 155k payrolls. This pace is down from 162k last month.
8:30 AM: Initial Jobless Claims
Economists are looking for 369k.
8:30 AM: Nonfarm Productivity and Costs
This one isn't as widely followed as the other reports. Economists expect productivity climbed 2.0% and unit labor costs increased by 1.2%.
8:58 AM: US Manufacturing PMI
This is a relatively new report. The Flash, or preliminary, reading came in at 51.3. Any reading above 50 signals expansion.
10:00 AM: ISM Manufacturing Index
This is a big one. Economists expect the number to come in at 51.5, unchanged from a month ago. The U.S. manufacturing sector is more exposed to exports than the services sector, which makes this number vulnerable to any overseas weakness.
10:00 AM: Consumer Confidence
This report was originally to be released on Tuesday, but was delayed because of Sandy. Economists are looking for a reading of 74, up from 70.3 a month ago.
10:00 AM: Construction Spending
Economists expect spending to have increased by 0.6 percent.
Meanwhile, the major automakers will be announcing their October sales. Economists expect a seasonally adjusted annual rate of sales of 14.8 million units.
Whew.
Now you're ready.
Read more: http://www.businessinsider.com/us-economic-data-november-1-2012-10#ixzz2AxdkZSoI
Earnings lift European shares, euro edges lower
Global Markets
* MSCI Asia ex-Japan falls, Nikkei ends up 0.2 pct
* China official manufacturing PMI, HSBC final PMI pick up
* Oil weighed by worries storm Sandy to cut fuel demand
By Marc Jones
LONDON, Nov 1 (Reuters) - European shares opened higher on Thursday, bolstered by relatively robust earnings reports despite economic weakness, while the euro inched lower as uncertainty over how the euro zone will handle crises in Spain and Greece dragged on.
The FTSE Eurofirst index of top European shares was up 0.2 percent at 0820 GMT, helped by UK corporate results including from oil major Royal Dutch Shell.
Small gains by London's FTSE 100 and Frankfurt's DAX cancelled out minor dips in Paris and Madrid .
" Some of the results look to be reasonably robust, in light of the weak economic backdrop," said Central Markets senior trader Joe Neighbour.
Shell posted a smaller than expected fall in profits, sending its shares 0.9 percent higher, and investors also welcomed news from British bank Lloyds and telecoms group BT.
U.S. stock futures were down 0.3 percent, suggesting a weak Wall Street opening following a flat performance on Wednesday when trade resumed after its first weather-related two-day closure since the late 19th century.
Away from stocks, risk appetite was mixed, with commodities such as copper up 0.4 percent, lifted by data from China showing the economy was perking up.
Oil hovered around $108.50 a barrel as investors focused on the possible effect on fuel demand from the damage caused by the Sandy storm along the U.S. East Coast.
The dollar gained 0.4 percent against the yen to 80.13 , approaching a four-month high of 80.38 hit last week.
The euro was pinned in the recent $1.28-$1.32 range, trading slightly weaker at $1.2934. The China-sensitive Australian dollar steadied around $1.0366.
Major currencies, like most markets, have been tethered in tight ranges for weeks due to uncertainty over Greece and Spain, the tight U.S. presidential election on Nov. 6 and the potential for the United States to run over a fiscal debt " cliff" early next year.
With Greece hammering out a deal to secure more bailout money later this month to avoid bankruptcy and no sign Spain is about to ask for euro zone help, European government bond markets were steady with benchmark German Bund futures barely changed at 141.75.