Tuesday could be an interesting day in the market. For a period we’ll be in a kind of a no-man’s land between the time ballots are cast and the hour at which the election is called.
Will the markets react very differently depending on who wins the White House? According to Joe Terranova the answer is a big fat “yes”.
”The bigger the Obama victory, the bigger the market rally will be,” says Terranova.
“The market has priced in Obama policies but not yet regime change -- markets will react positively to regime change,” he says. In other words Obama coming in with a landslide victory will give the market a sense that they’ve gotten the change they wanted.
According to CNBC’s Charlie Gasparino the Obama team has already come up with a short list for Treasury Secretary. The names on it include Larry Summers, Tim Geithner, Paul Volcker and possibly Larry Fink.
Larry Summers did a good job during the Clinton-era, adds Karen Finerman. (She seemed to like that name best.)
But investors fear Democrats taking full control of the Senate, adds Terranova. So the best case scenario for the stock market is less than 60 senate seats going to the liberals.
“If McCain wins, the market will take out lows from October 10th because it can not handle the uncertainty of a McCain administration right now,” Terranova speculates. In other words, in the short run a McCain upset could send stocks plunging.
That's despite the fact that Republicans are typically the party of business. It just goes to show how volatile the environment is right now.
You can see our entire interview with Joe Terranova at the end of the Word on the Street video.
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Trader disclosure: On Nov.3, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (BTU), (GS), (INTC), (MSFT), (NUE); Macke Owns (UUP), (SDS), (MSFT), (WMT); Macke Is Short (TM)
Finerman's Firm Owns (MSFT); Finerman's Firm Owns (OIH) Puts; Finerman's Firm Is Short (USO), (IYR), (IJR), (IWM), (MDY), (USO), (SPY); Seymour Owns (AAPL), (EEM), (F); Terranova Owns (VLO), (AAPL), (EXM), (FCX), (FTO), (POT), (X), (NOV)
Terranova Is Chief Alternatives Strategist Of Virtus Investment Partners, Ltd.; Virtus Diversifier PHOLIO Owns (IGE), (DBC), (DBV)
Terranova Is Co-Portfolio Manager Of The Virtus Diversifier PHOLIO; Virtus Investment Partners Owns More Than 1% Of (ABD), (ARE), (BIG), (CLB), (DLR), (EPR), (EXR), (MAC), (SLB), (SKT), (UA), (IGE), (DBC), (DBV),Virtus Investment Partners Owns More Than 1% Of Seagate Tax Refund Rights, Virtus Investment Partners Owns More Than 1% Of Shares Of Essex Property Trust Inc., Virtus Investment Partners Owns More Than 1% Of Shares Of Corporate Office Properties Trust SBI MD
CNBC.com with wires