Market Stabilizes Late Before 3rd Obama and Romney Presidential Debate 2012:
The U.S. stock market made a late day comeback as investors grabbed equities toward the end of the session. As more polls start to show Romney maintaining momentum from the first debate and not losing the gains after the VP debate or the second presidential debate, investors may be snapping up stocks for longer term holds. The third and final presidential debate between Mitt Romney and President Obama will be held tonight so market participants may be buying equities in anticipation the Romney rally could restart. The S&P 500 gained 0.63 to 1,433.82 or 0.04 percent today.
We expect both candidates to continue to take serious shots at each other tonight but this debate will be about foreign policy which usually favors the incumbent president. Mitt Romney will have to steer the conversation back to the economy via a weak domestic policy causes a weak foreign policy argument. He will also need to be on point with regards to Libya and can’t be taken by surprise if President Obama says he’s ‘offended’.
President Obama will have to use his extensive knowledge of world leaders to his advantage and steer clear from too much Libya talk. Iran and other hotspots are likely to come up but President Obama has several strong talking points in these areas. If the conversation turns back toward the economy even briefly, President Obama could lose his advantage with voters similar to the last debate where polls showed Romney had an advantage.
Because the election largely won’t be called based on foreign policy and a significant amount of independent/swing voters are likely to make their last judgment based on where the economy is headed. Expect pundits to proclaim President Obama the winner due to his stronger showing in the last debate but don’t expect this to stop the polling momentum Romney has gained as he closes the ‘women’ gap if both candidates perform similar to last week. Also expect some social media distortions from the left which Romney will need to combat this time after ‘Big Bird’ and ‘binders’ were left unchallenged.
Any perception that Romney scored well would be good for the market but President Obama is also good for the market longer term due to the decrease in political uncertainty. We are neutral on the markets short term but bullish through the end of the year. The S&P 500 gained 0.63 to 1,433.82 or 0.04 percent today.