Obama Speaks as Market Looks for a Leader
President-elect Barack Obama ran on a message of change. And voters responded to that message this week by electing him to the Commander in Chief and removing more Republicans from Congress.
However, Obama is not yet the president. And he spoke to that in his first press conference as president-elect Friday afternoon:
"The United States has only one government and one President, and until January 20th of next year, that government is the current administration. I have spoken to President Bush, and I appreciate his commitment to ensuring that his economic policy team keeps us fully informed as developments unfold."
The market will have to accept the fact that Obama cannot yet take action in terms of policy reform. He requested that President Bush help work with the Congress on an economic stimulus plan, saying "it should come sooner, rather than later."
Obama, who met with his team of economic advisors today, made clear his focus once he comes into office. "Immediately after I become President, I will confront this economic crisis head-on by taking all necessary steps to ease the credit crisis, help hardworking families and restore growth and prosperity."
Turning to the immediate issues in the economy, Obama suggested some sympathy for the auto industry. He said:"The auto industry is the backbone of American manufacturing and a critical part of our attempt to reduce our dependence on foreign oil. I would like to see the Administration do everything they can to accelerate the retooling assistance that Congress has already enacted."Both GM (GM) and Ford (F) announced earnings Friday. In particular, GM has experienced significant problems with cash flow and may not be able to continue without help beyond next spring. The stock market sold off as Obama spoke. The SPDR Trust (SPY) traded at $93.20 as he started his speech and traded down to $91.60. It has slowly recovered since. The market may have reacted to two notions. First of all, Obama is not the current president and thus cannot effect immediate change. President Bush remains in charge. Bush has offered minimal leadership during this financial crisis. His administration slowly responded to the unfolding crisis -- starting with ineffective voluntary programs last winter -- and then reluctantly issued tax rebates as a stimulus. The stimulus had little effect on consumer behavior. The economy continued to weaken and eventually the financial crisis forced his hand.
Select the service that is right for you!
COMPARE ALL SERVICESAction Alerts PLUS
TRY IT FREEJim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
Product Features:
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Dividend Stock Advisor
TRY IT FREENew! $49.95/yr
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
Product Features:
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Stocks Under $10
TRY IT FREEDavid Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.
Product Features:
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts
- Weekly roundups
Real Money
TRY IT FREE24/7 market commentary from Jim Cramer and 20+ veteran Wall Street gurus. Get access to the latest trading ideas on stocks, options, and ETFs as well as a real-time forum to see the pros exchanging their investment ideas.
Product Features:
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
Real Money Pro
TRY IT FREEAll of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
Product Features:
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Options Profits
TRY IT FREEOur options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
Product Features:
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV