As voters prepare to go to the polls tomorrow, politicians are running around giving speeches in hopes to convince the electorate that they are fighting for them. As for the economic landscape and psyche, things could not be better. The stock market is soaring, interest rates are still relatively low, oil prices are manageable, and geopolitical problems have disappeared. What a perfect environment in which to be an American.
Once voters get past tomorrow, what will the next two years bring. If the republicans prevail, we will continue to have fun with oil stocks. If the democrats win, oil, telecom, defense and healthcare will come under scrutiny, while technology will begin to show some signs of life.
This morning, investors woke up to news that OSI Restaurant Partners (OSI) was being bought out and taken private, Four Seasons was being bought by a group of private investors that included Bill Gates, and Kos Pharmaceuticals agreed to merge with Abbott Labs (ABT).
The recent merger news is leading investors to believe that the market is cheap, and the major market indexes rallied to close up sharply on the day.
DJIA: 12,105.55, up 119.51
S&P 500: 1377.78, up 15.48
NASDAQ Composite: 2365.95, up 35.16
Election Day will be over tomorrow (finally), and we will see what the markets will bring once the "Magic" ends.
My best guess is the celebrations are almost over, and the reality of a slowing economy will soon take hold.
