U.S. stocks will try to bounce back, but overnight trading in global markets was
not encouraging.
Today's Economic Calendar:
- 8:30a.m. Initial Jobless Claims. Expected: +0K. Previous: +35K.
- 10:00a.m. Mar Wholesale Trade. Expected: +0.6%. Previous: +1.1%.
- 10:00a.m. DJ-BTMU Business Barometer. Previous: +0.1%.
News For Thought
Senate proposal to quell futures speculation could backfire. According to The Wall Street Journal:
"At issue is a Senate proposal to mandate higher cash collateral for energy-futures trading. The proposal is part of a package of measures that Senate Democrats unveiled Wednesday -- and will try to bring to the Senate floor for a vote by Memorial Day -- in an effort to curb speculative trading that some say is contributing to soaring oil prices. Trading-exchange officials are lobbying against the measure, saying it could cause a migration to foreign exchanges and rob the market of the liquidity that some participants in the market say they need to hedge their risk. Wednesday, the acting chairman of the Commodity Futures Trading Commission also criticized the measure."
Moody's president quits after subprime debacle. According to the Journal: "Brian Clarkson, the driving force behind Moody's Investors Service's push into lucrative but riskier businesses, is stepping down as president and chief operating officer of the oldest bond-rating firm, the company announced Wednesday. Mr. Clarkson's exit, effective by July, marks the highest-profile casualty to date in the controversy over the complicity of credit-rating firms in the subprime meltdown." |
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It may have been coincidental, but Obama's big win in North Carolina and his better than expected showing in Indiana did precede a 200 point selloff in the U.S. stock market.
To be sure, the market had been rallying and it was up against key resistance, so it might have happened anyway. Still, it's worth thinking about, since it happened, and since Obama could be the next president of the United States.
And for those of you who back Obama, please save the nasty e-mails. This publication is about making money and risk management, not about picking fights over politics. We'll know soon enough who wins, and how they'll plan to run things. Just think about your wallet for now, not your political persuasion.
Here's where things seem to stand. Mrs. Clinton is getting booed, as she vows to fight on. According to The New York Times "Mrs. Clinton endured boos when she mentioned her proposal for a gasoline tax holiday, catcalls when she spoke of ending the Iraq war and, most difficult of all, the heckling of her daughter, Chelsea, who introduced her."
Indeed, the natives are way restless, as the Times reported: '“End the dynasty!” a young man holding an Obama poster shouted when Chelsea Clinton stepped to the microphone.'
And the hordes are circling the wagons, as one by one, senior party members are defecting to Obama's camp, as George McGovern did on Wednesday.
When in doubt, we like to check in with Bob "The Prince of Darkness" Novak's column. He seems to have a scalpel pen that, although partisan, can cut through the nonsense and reach decent conclusions.
Novak thinks that Mrs. Clinton can't win, and that she may leave the race before June. The usual "pitches" from the Clinton camp about Obama - "we don't know enough about him" and that Clinton does better than Obama in national polls - will "fall flat" on the ears of super delegates, thinks Novak.
Novak added: "Obama won over 90 percent of the African-American vote in both states Tuesday, and that made life difficult for Clinton. Super-delegates flinch at going for Clinton because it would be seen as intentionally blocking the first black candidate with a chance to be nominated for president-threatening to alienate the most loyal element in the Democratic Party's base.'
And now it gets interesting. Novak thinks that McCain can't win the national election unless he plays dirty, something that Novak says McCain doesn't like. Here are his words: "With Clinton about to be out of the picture, look for a big Obama jump in the polls to take a lead-maybe a commanding lead-against McCain. The dreadful state of the GOP, as reflected in its recent loss of a Louisiana congressional seat (see below), was bound to catch up with the presidential race. McCain cannot win without sustained battering of Obama, a tactic that McCain deplores."
And as we note below, polling data supports his notion, at least partially.
Conclusion
So now the political season is starting to take shape. Obama seems headed for the nomination, and some are saying that Clinton would take the Vice-President slot.
Both Obama and Clinton have proposed policies that are traditionally negative for Wall Street, higher taxes, including "windfall" profit taxes against oil companies, as well as expensive health care remedies.
To be sure, McCain's health care thoughts are also likely to be expensive, and some of his other policy proposals don't seem to add up.
Yet, what was once ethereal, ie. who will be running in the fall, is now taking on form. And the markets will, and may have already started handicapping the situation.
So here are some polling results. Real Clear Politics has Obama up over Mc Cain by 2.4 points, 46.7 to 44.3, in its average of polls. Real Clear politics was a good source of data during the 2004 election, as it picked Bush over Kerry correctly while others missed it.
Rasmussen Reports, which also called Bush over Kerry correctly before others, has Clinton over McCain nationally by a 47 to 44% margin, with Obama 45 to 44%. Rasmussen added that Tuesday was "the eighth consecutive day that Clinton has outperformed Obama in the general election match-ups."
The University of Iowa's presidential election futures (winner takes all model) has the Democrats over the Republicans by a 57 to 41% margin.
And Rasmussen's electoral college projections also have the Democrats ahead. So if the election was today, McCain would likely lose to either Clinton or McCain based on these general polls.
For Wall Street, it's usually all about taxes and how easy it's going to be to make money. Clinton I raised taxes, but balanced the budget and was a staunch defender of the dollar. He also championed anything that Greenspan wanted to do, so he was able to rally the markets.
But, at this early stage of the game, neither Obama or Clinton II seem to have any intentions of balancing budgets, propping up the dollar, or even acknowledging the existence of Wall Street.
So, even though it's still early in the game, it seems as if the markets are starting to get jittery.
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