08 Presidential Campaign Effect On Stock Markets

The presidential battle will likely cause the markets to climb this year due to political interests and statistical evidence. The candidates along with their campaign contributors have invested heavily in the forms of money and political whip cracking, and they play to win.

Current US Economic State

Still winding from the credit crunch effect, the financial markets have experienced increased volatility with spring. The major stock index growths have slowed while financial institutions hummed busily with contingency plans. The global liquidity squeeze has commenced, yet somehow looks on hold. The near term future looks mystifying.

The markets nevertheless have stayed afloat and investors mostly happy, even in spite of somewhat unenthusiastic sentiment expressed by Ben Bernanke lately. This resulted from additional liquidity provided by the US Federal Reserve along with equity buying sentiment via lowered interest rates. The next economic downturn has been slowed down.

Current Popular Candidates, Campaign Designs, and Contributors

Hilary Clinton, Barack Obama, and John McCain have applied tremendous media exposure since the campaigns commenced. It is then logical to conclude that these candidates have more than adequate funds raised and readily available, most likely via business interests.

The campaigns aim at several key topics. The American voters have lately become absorbed with the Iraq war, Iran, social benefits, and immigration mostly, and the candidates respond elaborately regarding these issues. With the economy and fiscal responsibilities less mentioned, the voters are designed to focus more readily at the said subjects.

The presidential campaign contributions include a vast amount of corporate interests, and they intend to keep voters attentive and associate positive economic times with the candidates. To maintain political objectives, large donators would likely attempt to help the economy stay afloat and growing for the year.

Quantitative Evidence

According to seekingalpha.com, by the 4^th year of past presidential terms, the S&P index has provided an average return of 8.62%, and 3.75% for the second term. The numbers do not lie, and put forth a positive expected return. This numerical representation affirms the theory that election years generally call for bullish economic times, despite the ongoing fiscal shenanigans.

Last Words

Despite the above, the US financial industry has never experienced a shake up as hard as the recent credit market matters. This problem is unprecedented and investors should take caution with bullish bets. When it comes down to it, wiser decisions still hinge on diligent research and meticulous planning.