NEW YORK ( TheStreet) --Many investors and executives in the financial sector love to gripe about President Obama, so it wouldn't be a surprise to see shares of a few financial companies cheapen Wednesday following his re-election.
One good candidate for a selloff is Annaly Capital (NLY), whose CEO, Wellington Denahan-Norris, expressed concern about "more policy meddling," spurring mortgage prepayments. The CEO also worries a more active Federal Reserve under Obama would create an "uneconomic competitor," to mortgage bond holders such as Annaly, as Bloomberg News noted in a report on Tuesday.
Coming off the heels of disappointing third quarter results which drove Annaly shares lower by 3.59% Tuesday, Denahan-Norris may regret his impromptu soap-box speech. By setting his investors up to be concerned about an Obama victory, the CEO may spark a further drop in the shares on Wednesday.
But investors would be wise to be skeptical of any such market reaction--whether to Annaly or any other financial company. The truth is that whether the President of the United States is a Democrat or a Republican usually has very little impact on the fortunes of a company.Just look at UnitedHealth Group (UNH)--viewed as a surefire target of Obama health reform goals. Its shares have more than doubled since Obama took office at the start of 2009, despite losing nearly 55% in 2008--a year when markets were expecting a Democratic victory and a legislative attack on the health insurance industry. The legislative attack on financial services, such as it was, already happened. Obama presents no further threat. Markets may realize this on Wednesday, but if they don't, it will likely create some bargains in the financial sector. -- Written by Dan Freed in New York. Follow @dan_freed
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