Markets React Favorably After President Obama and Mitt Romney Clash In 2nd Debate:
Yesterday’s debate was stunning. Both Mitt Romney and President Obama were outstanding in their arguments yesterday. President Obama had a few good lines such as “1 point plan” that gave him an edge compared to the prior debate which was in a different setting. The town hall style debate worked in both candidates’ favor and allowed them to enter into each other’s space civilly as they answered questions.
Mitt Romney ceded some ground on Libya but luckily the election is most likely to be decided on the economy, a topic in which he gained more momentum based on CNN and CBS polling. Frankly, the debate was a tie but because of President Obama’s poor performance in the first debate, he was given the edge by most observers due to his increased vigor.
Stocks reacted positively today after the debate sunk in with investors but this momentum may not last if there is no follow through tomorrow. The initial reaction from market participants seems to confirm that the debate was a tie but a strong performance by Romney would have put him ‘over the top’. Romney was smart to tell the moderator “no” on occasion and go back to a theme he wanted to explore further but Paul Ryan did a better job of explaining how raising taxes on the top 2 percent would only pay for the government for a few days. President Obama didn’t duplicate Biden’s laughing style which confirms the VP lost to Ryan a few days ago and he cleverly threw in something about the ’47 percent’ when the softball was thrown his way by Romney himself.
Romney can’t tie President Obama in the next debate and must come out swinging again even though President Obama had several good jabs. Romney got caught differentiating himself from George Bush and allowed the narrative that the last 10 years caused the last 4 years to remain a central theme while not harping on the economic difficulties the country is going through, the ‘fiscal cliff’ or if consumers are ‘better off’/believe they will be. We remain bullish long run but we have gone back to neutral bullish in the short term as we reassess where the market may be headed. Shorting stocks continues not to work for long periods of time and the S&P 500 rose 5.99 to 1460.91 today.
The debate should be considered a proud moment in American democracy and is perhaps one of the best of all time. There was no loser though it’s somewhat debatable who won.