Currencies
This blog post originally appeared on RealMoney Silver on June 9 at 7:25 a.m. EDT.
Over the next few months, the outcome of the November 2008 presidential election will importantly influence the U.S. stock market. Currently, Senator Obama has a relatively clear lead over Senator McCain in most of the polls, but, as we have learned over the past six months (e.g., in the Obama/Clinton Democratic primary contest), almost anything can and usually does happen. I have written generally about what a Democratic or Republican win might hold for equities. Today, I will attempt to forecast possible and more specific outcomes for the senior averages -- namely, the S&P 500, which today stands at 1,360.
Below, I have linked the political outcomes with the price of crude oil (a total of four scenarios), as the cost of energy products must be considered hand-in-hand with politics these days! (I have assumed that the Fed is on hold for the balance of the year, the U.S. dollar is range-bound and is relatively unchanged and that corporate profits are slightly below today's optimistic expectations in all four scenarios.)
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1. If Senator McCain wins the presidency and crude remains above $110 per barrel, then my S&P 500 forecast is 1,325 to 1,400.
2. If Senator McCain wins the presidency and crude is below $110 per barrel, then my S&P 500 forecast is 1,450 to 1,500.
3. If Senator Obama wins the presidency and crude remains above $110 per barrel, then my S&P 500 forecast is 1,225 to 1,300.
4. If Senator Obama wins the presidency and crude is below $110 per barrel, then my S&P 500 forecast is 1,300 to 1,350.
(Note: Again, the S&P 500 currently stands at 1,360.)
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| Dow Jones | S&P 500 | NASDAQ | 10-Year Note |
|
|---|---|---|---|---|
| 12,419.86 | 1,313.32 | 2,837.36 | 16.25 |
Oil *
103.00
|
|
DOWN
160.83 |
DOWN
19.10 |
DOWN
33.63 |
DOWN
1.06 |
10 Yr
1.62%
SPDR Gold
151.91
|
|
-1.28%
|
-1.43%
|
-1.17%
|
-6.12%
|
Data delayed 20 minutes |


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