Salient to Investors:
Brian Jacobsen at Wells Fargo Advantage Funds and Bruce Bittles at RW Baird said Obama will continue to support the Fed’s interest-rate policy. Bittles said Obama’s victory will make the fiscal cliff more difficult to deal with. Jacobsen said Bernanke will serve another term because his academic writings recognizes that monetary policy is a long-term experiment and not something to walk away from.
Obama’s victory in 2008 spurred the biggest plunge ever for the Dow on the day after an election, yet gains for American assets over the past four years are among the best in the developed world.
Larry Gilbert at HighTower Advisors is very cautious, saying we’re entering the continuation phase of the bull market versus the initial expansion.
Matt McCormick at Bahl & Gaynor sees a bumpy ride in 2013.
Les Funtleyder at Poliwogg said Obama’s victory preserves the status quo for health-care providers and the price impact on the stocks will be limited.
Jonathan Golub at UBS said shares of alternative energy suppliers, discount retailers, hospitals, specialty pharmaceutical companies and communications infrastructure providers will benefit from Obama’s win.
Credit Suisse said clean-technology companies would do better under Obama, while education stocks may be hurt.
Deutsche Bank said close races have historically generated rallies between Election Day and the end of December.
Laszlo Birinyi at Birinyi Associates expects the bull market to last another year as individuals regain confidence and return to equities after withdrawing money since 2007. ICI said investors have added more than $1 trillion to fixed-income managers since January 2009, withdrawing $350 billion from funds that invest in US stocks.
The S&P 500 trades at 14.4 times reported earnings, a 12 percent discount to the historic level, and below the five-decade average since May 2010, the longest stretch since the 1970s.
Howard Ward at Gamco Investors said the stock market should benefit as policy uncertainty recedes.
Jason Brady at Thornburg Investment Mgmt said the top concern of the bond market is the composition of the Fed and whether it continues to purchase assets.
George Feiger at Contango Capital Advisors said the increase in U.S. government debt means the winner will not have tools to boost growth as the things that have to happen to get a solution have such tight boundaries.