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Which Candidate Does the Market Favor?

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    Potomac Research political strategist Greg Valliere on stocks and the presidential election.

  • Duration 3:01
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-- Stocks in the presidential election diverging views over the past week on which candidate.

The markets applying to as their favorite in the race and who traders think will actually be the winner joining us now good Greg value -- chief political strategist but the the -- research group.

Greg.

Other markets right now being down -- -- they are saying that Obama's gonna win.

Well you gotta say in the last week or two there's been a shift to subtle shift.

In some of the battleground states that poll yesterday was really significant.

Pennsylvania big Obama lead not a surprise.

Ohio a -- a little surprised Florida.

Was a big surprise.

If Obama really is up in Florida that's a sign there's been a shift and that's a sign.

He's the front runner and are you saying the markets know this through the markets not yet know this.

Well I think the markets know it I think the markets pay very close attention to these types of polls.

People look at in trade people look at the Gallup website.

And I do think in the last 2448.

Hours especially after this lousy trip to Europe that -- that Romney had.

That people in the markets are beginning to agree perhaps would need.

That Obama once again as the favorite.

If Obama wins in early November.

And all of those to new taxes and tax increases are then in place.

Are investors gonna have a massive sell off right away so they can get lower tax rates on the profits that they book before year end.

It's a risk isn't it it it is a threat.

-- -- -- in my group -- on the fifty yard line I don't abdicate one candidate or another but.

I would have to say that a victory for Obama.

Which means we may see some higher taxes at some point in 2013.

If not sooner a victory for Obama would not be well received in my opinion by the markets.

A victory for Obama would not be well received it just they still -- bluntly like -- Victor the victory for Obama would be devastating of the markets how bad that are not gonna happen.

Now I'm not gonna go there but I do think that people who worry about capital gains and dividend taxes things like that.

Would have to be concerned about higher rates and -- thirteen people would be concerned about higher top individual rates.

More importantly perhaps.

It may be the end of the winter before we get this all resolved if Obama wins.

If Romney wins I think it would get resolved within a week or two.

This inauguration which would come on January 20 why is that why did you take longer to get resolved if the president's reelected.

Well I think there's going to be a gridlock like we've seen time after time.

In the last year or so and the president would like some great big compromise but that would include.

Big big tax increases which never would get through the house so I think -- gridlock deal would get kicked down the road.

It could be the end of the first quarter before we see any kind of a break -- so there's uncertainty which is I think really harming the economy today.

This uncertainty could persist for several more months maybe six or eight more months if Obama wins -- we got to --

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