NEW YORK ( ETF Expert) -- Most Americans believe that the economy is on the wrong track. For that matter, Bill Clinton believes the country is in a recession.
Polls don't typically delve into why people believe the economy is in bad shape. However, it's a pretty safe guess that citizens see declining home values and poor job prospects when making their assessments.
Not surprisingly, then, most people cringed at the White House's assertion that the private sector is "doing just fine." Granted, President Obama had been addressing relative hiring in his statement to the media (i.e., private payroll jobs versus government/public jobs). Yet, that's as dissatisfying as the mutual fund manager who touts losing -33% in 2008 when the Standard & Poor's 500 relinquished -8%.
What's more, businesses are practically paralyzed when it comes to the uncertainty surrounding the upcoming election. Typically, voters feel more comfortable, more certain, sticking with an incumbent. However, polls regularly show that Americans trust Romney more than Obama on improving the economy.So why haven't U.S. stocks corrected more than -9.9% with a slow-growing economy, dangerous signs from the employment front and Obama still favored to win the general election in November? Why is the S&P 500 actually up 4.1% year-to-date... in spite of weakening GDP in China and a never-ending series of signs that the eurozone might crumble? Some have suggested that the more negative the economic indicators, the better the chances for Mitt Romney. They also suggest that Romney would be infinitely better for corporations as well as shareholders. Is it because Romney brings greater certainty to the taxation/regulation table, freeing up the decision-making of corporate leadership? Is it possible that we'll see a Romney rally in stocks here in 2012? Are we already seeing "stealth support" at key trendlines and important psychological declines (the "10% correction") because of the challenger? I think it goes deeper than the psychology behind Romney's chances. I think it goes more to a probable Republican victory if Romney picks Marco Rubio as a running mate. U.S. Sen. Rubio virtually assures that the GOP would win one of the most important prizes of the Electoral College: Florida. He increases voter turnout by firing up conservatives in the Republican Party. Rubio helps with Hispanic votes in swing states like Nevada and may make President Obama campaign harder in places like California. He (Rubio) appeals to women and minorities in ways that Romney does not.