Democrats, GOP Fail to Calm Worried Investors
CHARLOTTE, N.C. (TheStreet) -- President Barack Obama delivered his convention speech Thursday night, but it didn't offer substance for worried investors.
Democrats and Republicans alike failed to quell any uncertainty about a looming fiscal cliff and a stagnant jobs market.
"This uncertainty within the election as two diametrically opposite philosophies when it comes to the economy ... leads to confusion," said Jeffrey Sica, chief investment officer of Sica Wealth Management. "I think when investors get too confused, and there's not a level of transparency or certainty, there's a much greater likelihood that markets will sell off based on that."
Polls suggest that Americans could be in for a tight race between now and the election.Investors, Sica said, are treating this election like economic data: When Mitt Romney or Obama unveils more specific economic policies, it allows them to prepare a clearer strategy in the event that either candidate scores victory in 2012. But there's no way to know for certain which direction fiscal issues are headed without knowing who will win. Of course, that won't be decided until Nov. 6. One early indicator investors could watch for is a post-convention bump that sustains itself. "When all is said and [Obama] gets like a five- or six-point blip, and that thing doesn't disappear, then that would be significant," said Doug Roberts, an analyst at Channel Capital Research.com. A comfortable lead could cause investors to assume Obama (or in the reverse situation, Romney) and his economic policies as the inevitable victors. But an Obama or Romney victory doesn't guarantee a policy monopoly. Control of the House and Senate proves hugely critical to Washington policy-making. Republicans have been spending heavily on Senate races as Democrats hold the majority of seats up for grabs. Earlier this week, Democrats held a press conference at the convention to express their confidence in retaining a Senate majority. Guy Cecil, executive director of the Democratic Senatorial Campaign Committee, added that he has never seen so many tight Senate races in his career. Cecil went state-by-state to point out the fundraising advantages and disadvantages for Democrats in each race. He even pointed out different strategies on social and economic issues that may favor Democrats in the long run.
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