Illinois Sen. Barack Obama's historic victory can't help but be a positive for markets, even if briefly.
American voters cast their ballots for change, and as they voted in the presidential election, they made it clear they were unhappy with the economy, upset about their personal finances and looking for a government that will handle the financial crises differently. They also elected an African American to the highest office for the first time, an event that should energize some of the U.S. population, which historically has thrived on and gains confidence from the belief that all Americans can succeed.
U.S. Presidential Election
- Election Won, Economic Policy Now Obama's Focus
- Night of Drama Punctuates Senate Races
- Can He Jump-Start Confidence?
- The New Investment World: Together and Separate
- Five Economic Challenges Ahead For Obama
But investors will soon focus back on the economy and what the President-elect will do to tackle its many problems. The markets may also gain temporary relief from the fact that a long, contentious campaign is over.
Wall Street traditionally fears Democratic policies and in the case of Obama, it fears his tax proposals. But plenty of pundits have been saying that his tax plans may be put on hold because of the struggling economy.
"Obama's got to come out of the box very strongly," said Greg Valliere, chief political strategist at Stanford Financial Group. He said Obama needs to get an economic summit together immediately and set the groundwork for the Nov. 15 meeting with world leaders on the financial crises.
Valliere said he expects Obama to move quickly on identifying a Treasury secretary. He said New York Fed's Tim Geithner would be a top candidate, followed by former Clinton Administration Treasury Secretary Larry Summers.
Wednesday Look Ahead
Valliere said he expects the market to very shortly turn its focus to Friday's jobs report, expected to show a worsening employment picture. Data expected Wednesday includes the ADP employment report, released at 8:15 a.m., and ISM nonmanufacturing data, reported at 10 a.m.