Before November 2nd, marketing analysts pointed out market shifts during an election trend different ways depending on partisanship. According to some analysts, if a Democrat unseats a Republican, the trend is stocks rise. Not so the other way around.
In 2004, a Republican incumbent held his seat and the three days following the election, stocks have been nothing but bullish. In the days following the election, stocks have shown up green on the tickers and are showing no signs of falling after optimistic job numbers were reported on November 5th.
The Labor Department reports that 337,000 news jobw were created in the last month, according to Reuters, this surge in jobs is a "vindication for its [the Bush administration] tax-cutting policy".
There is still a net loss of jobs in the tenure of the first Bush administration, but it is by far reduced from the reported numbers during the presidential campaign.
Fron November 2nd to the 5th, the Dow Jones Industrial Average (DJIA) has risen over 300 points. A huge turn around from previous days when the DJIA sank below the 10,000 point mark, and the Nasdaq fell below 2,000. Just a few months ago, the Nasdaq had broken the seemingly unreachable 2,000 mark, and so quickly, it fell back into its rut. Heavy trading and job growth numbers have helped the market jump.
Along with that, the focus on the presidential election, and constant reminders of some of the costly and wasted resources and efforts done by the government, investors can be secure in their business. Investors are not repeatedly hearing news of job fluctuations and pessimism with economic growth. Now, with proof of significant economic growth, and with such great intensity, the job loss is looking to even out and the Federal reserve is taking notice.
The optimistic trends in the market could (and most likely will) call for another rise in interest rates; another godsend to the investors. If interest rates move at this rate, and in due time (enough to gain back incredible investor confidence), rates could be back up 3-4%. This idea, hitched with record home ownership numbers, could really make the case for tax cuts.
With the hotly contested permanent tax cuts called into question, this economic boom could not be better scheduled, with the holiday season just around the corner. President Bush coined the economic _expression "we're turning the corner", and the economy may just be making that turn with extra cash in people's wallets and the holiday season - consumer spending could be up, which could increase economic health exponentially. This is the situation the Bush administration looked for - to set an example for the American people of the virtue of tax cuts. In the free market capitalist mentality, consumer spending dictates economic vitality, and if more people are spending, businesses are benefiting, and the markets may, in essence, have a "dot com effect".
The "dot com boom" of the 90's helped economic stability at the time and provided a major portion of the economic fortune that built under the Clinton era. Once these tax cuts have their venue to shine, in this case the Christmas shopping season, once the ball gets rolling, the extra cash Americans will be spending, will invaraibly benefit the economy that floundered in the first term.
Not only have job numbers in October seen such prosperity, but apparently September and August's numbers were under valued. September and August job numbers were reported are 96,000 and 128,000, respectively. In reality, September saw job numbers at 139,000 and August with 198,000.
In another great turn of events (call it a lucky "happenstance"), oil prices have also seen a drop from the huge numbers posted following a series of worldwide events. This, investors say, is in relation to the debilitating health of Yasser Arafat. It is a possible notion, that the death of Yasser Arafat could be the best thing to happen to the oil industry. Despite a consequential stuggle for power if Arafat dies, his passing could begin to lay ground for some form of stability in the Middle East, thus raising efficiency for the oil industry.
It has been a good post-election economic report for the Bush administration, and if the coming months prove true for analysts and investors, the tax cuts could prove to be beneficial for all Americans and a new economic resurrection is on its way in Bush's second term.
Fron November 2nd to the 5th, the Dow Jones Industrial Average (DJIA) has risen over 300 points. A huge turn around from previous days when the DJIA sank below the 10,000 point mark, and the Nasdaq fell below 2,000. Just a few months ago, the Nasdaq had broken the seemingly unreachable 2,000 mark, and so quickly, it fell back into its rut. Heavy trading and job growth numbers have helped the market jump.
