Romney Picks Ryan As VP, Conservatives Rejoice; Is This A ‘Game-Changer’? How Will Markets React?
Mitt Romney has gone conservative with his pick of Paul Ryan as his running mate. Paul Davis Ryan is the U.S. Representative for Wisconsin’s 1st congressional district, elected in 1998, and he is very vocal in the Republican Party. Ryan is young at only 42 years of age and gives the Republican Party an edge they didn’t have in the last election with the youth vote. McCain tried to capture some of Hillary Clinton’s glory by adding Sarah Palin to his ticket, but some people such as Dick Cheney and others believe it was a mistake because she wasn’t ‘seasoned’ or there were errors in the process of selection.
Romney isn’t making the same mistake. He had a long list of candidates to choose from and most political analysts underestimate how important his selection was. There hasn’t been this level of excitement for finding out who would be vice president in several elections. Romney went with the most conservative choice possible to please his base and get more Republicans behind him. It will be interesting to see if more money flows to Mitt Romney now that he has made this election a clear choice about the direction he thinks the country should go in. Romney has already won the fund raising battle for the last three months.
FUNDRAISING FOR THE LAST 3 MONTHS MITT ROMNEY VS. PRESIDENT OBAMA
- JULY: $101.3 million, Romney – $75 million President Obama
- JUNE: $106 million, Romney – $71 million President Obama
- MAY: 76.8 Million, Romney – $60 million President Obama
An Election Inflection Point
Scott Walker showed Wisconsin is at play for the Republicans. It’s clear Ryan will increase the probability Romney is elected and the hype over his selection is causing political consultants to rethink how they advise candidates. Romney texted to his mobile list a message that they could download a Mitt Romney app to find out first who he would be selecting for VP. This advertising technique will be studied in business schools later if he wins because he used the most relevant technology effectively to generate interest in his choice for vice president.
Paul Ryan is known for his budget plan and adds other variables to the Republican ticket. He has charisma, oratory skill, represents the young Republican, and has positive reputational spillover effects in his own party that will flow to Mitt Romney. The web and social media like Paul Ryan because of his age and has a good story which usually jives well with heavy internet user demographic base. President Obama wasn’t much older when he was running for office and represented a young Democratic voice that was an alternative choice for voters.
President Obama’s chances of getting reelection have reached an inflection point based on analysis that shows his likelihood to win turning a few weeks ago. This means the chances of President Obama winning are not likely to rise although victory for either candidate is still by no means certain. An inflection point suggests a change in the run rate that may not change back.
How Will Markets React?
Markets may react positively to the news that a true conservative has been added to the ticket to replace President Obama. We expect a “Romney Rally” to continue in the short term but while this doesn’t necessarily mean he will win, it does suggest the market is more comfortable with a possible replacement of Obamanomics. Look for some sectors in healthcare to move higher (those that won’t be impacted in the volume increase brought on by Obamacare) as well as the financials.