Stock market obama re-elected

Author: sLetix On: 05.07.2017

The stock market took a major beating today after the election of Democrat Barack Obama and Democratic gains in both the House and Senate. The Dow Jones industrial average losing almost points and markets in Europe also saw drops.

Initially, stocks fell as investors cashed in from a week-long rise in share prices. But then in the afternoon the sell-off gained speed as traders started to question exactly what an Obama presidency would mean for American businesses. Investors also shifted their focus back to the economy in anticipation of Friday's job report where the government is expected to announce roughly , in lost jobs in October.

Click Here to See How Your Stocks Are Doing. With the closely watched presidential election over, the business world is now bracing itself for the new reality of a Democratic-controlled Washington.

That likely means stronger oversight and regulation of the financial sector, a tax structure that is less friendly to companies, increased spending on entitlement programs and more labor-friendly policies.

The Dow started the day down about points, fell points by noon and ended the day down about points or 5. The Nasdaq lost 5. In Europe, Great Britain's FTSE fell 2. Asian markets were up 2 percent to 4 percent, following a strong rally on Wall Street Tuesday. The Dow had ended Election Day up points, or 3.

It was the best showing for the market on an Election Day ever. The previous record was a 1. Before , the market was closed on Election Day.

stock market obama re-elected

Talk on Wall Street switched this morning from who would win the election to how will Obama shape his administration. Investors are closely watching who the president-elect will pick as his treasury secretary.

The likely candidates include former Treasury Secretary Lawrence Summers; Tim Geithner, the president of the New York Federal Reserve; and a distant third possible pick of former Federal Reserve System chairman Paul Volcker.

Jon Corzine's name has also been floated as a possible pick. The former Goldman Sachs CEO said on CNBC this morning, "I'm never going to say never to anything. I like what I'm doing. I have not had any conversations with anybody about this job. Today's market woes just shows a little of what President-elect Barack Obama will face: What began with the explosion of the housing bubble has unfolded into a far-reaching global financial crisis affecting everything from banks to retail sales to the auto industry.

Consumer confidence is hovering at record lows and consumer spending has declined for the first time in 17 years as Americans prepare to ride out what economists think could be the most severe recession in decades.

The first order of business for the new president will be to stabilize the economic crisis.

Helping distressed homeowners will be a priority for Obama when he enters the White House. With one in six U. Obama laid out a rescue plan for the housing crisis.

stock market obama re-elected

Obama proposed a day moratorium on home foreclosures, which would give some homeowners a chance to catch up on missed payments and give the government a chance to develop a systematic plan for rewriting the terms of unaffordable mortgages for qualified homeowners.

Obama also wants to empower bankruptcy judges to lower mortgage payments to keep people in their homes, something the mortgage industry opposes. Rising unemployment is another challenge for President-elect Obama. As consumers slow their spending, businesses are being forced to lay off growing numbers of workers. Some economists expect the next jobs report, due out Friday, to show that as many as , Americans were cut from company payrolls in October.

Obama has pledged to extend unemployment benefits and eliminate taxes on those benefits.

Dow Sinks Day After Election; Obama to Inherit Bad Economy - ABC News

He supports allowing more leniency on hardship withdrawals from k and IRA savings accounts, by temporarily lowering or suspending the tax penalties on withdrawals. Many economists believe to that to boost the sagging economy, Congress will pass another economic stimulus package, perhaps even before the new president takes the oath of office in January.

That is particularly true if Obama wins. Those could include extending unemployment benefits and food stamps, funding state and local infrastructure projects as a means to create jobs, providing federal funds to state governments to cover rising Medicaid costs, offering mortgage relief for struggling homeowners, implementing tax cuts or rebate checks or even extending existing tax rates, and possibly providing money to help Americans pay for higher heating bills this winter.

Who will pay higher taxes and who will get a tax cut became a defining issue in this election, with "Joe the Plumber" becoming a symbol of American fears of "redistribution" of wealth through changes in tax policy.

The ailing auto industry will also be a challenge facing the new president. Thousands may face unemployment if General Motors, Ford or Chrysler is forced into bankruptcy. Obama says he would create 2 million jobs by rebuilding the country's infrastructure and he hopes to create 5 million "green jobs" through investment in renewable energy and building out the broadband network to all corners of the country.

And how will the stock market react to Obama's election? Many have said an Obama victory is already "baked in the cake" on Wall Street. And while history shows that stocks tend to rally the day after a Republican victory and sell off on a Democratic victory, in the long term the outcome of presidential elections is not a reliable predictor of performance. Like many American voters, traders on the floor of the New York Stock Exchange were ready for this long campaign to be over.

Rogoff, an economics professor at Harvard University and a former economist at both the International Monetary Fund and the Federal Reserve, said earlier this week that the next U. The government's Social Security fund, in particular, will have no choice but to turn to deficit spending, he said. The state of the environment, he said, will also have consequences for the economy in the coming four years. Rogoff said addressing environmental concerns may require new taxes or caps on pollution.

The estate or inheritance tax, which generally applies to the very wealthy, is scheduled to be repealed in It may prove important to the president's work on income disparity, Rogoff said. Kent Smetters, a professor at the University of Pennsylvania's Wharton School and former deputy assistant secretary of economic policy at the U. Treasury, said that the largest economic issue facing the new president is the "looming entitlement programs.

Smetters said the problems with Social Security, Medicare and Medicaid are much larger in magnitude than the fallout from the subprime housing market and the government's bailout of Wall Street firms. He said the problems with these programs today are "much bigger" than what past presidents have faced.

You can't possibly increase taxes enough to deal with this problem," Smetters said. Next up, Smetters said, the president should work to cut the corporate tax rate. India and China have a fast-growing middle class that now has money to invest.

Keeping the tax rate at its current level would hinder investments and growth of our economy, Smetters said. The third big economic area for the new president -- and Smetters emphasized that it was the third most important -- is the government bailout. There is going to be a regulatory tangle administering the program and a call for a whole new set of oversight regulations for Wall Street. But the key, says Smetters, is for the new president to determine what type of precedent the bailout sets for future businesses and investors.

Lewis Alexander, chief economist at Citigroup Inc. One key issue for the next president will be "getting the financial system back so that it is actually contributing to growth," he said.

Firstly, "the economy is contracting quite sharply, that would be challenge number one. The expectation is that the economy is going to be contracting through the middle of next year, with mild growth following that. Alexander commented before Tuesday's election that when Bill Clinton took office in and when Ronald Reagan took over in they faced a sort of cyclical challenge that is not the acute problem in the financial and global sector that is seen now. That inevitably means they are going to have to rein in their priorities," Alexander said.

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Entertainment Virtual Reality Health Tech Investigative Sports Weather Privacy Policy Privacy Policy Your CA Privacy Rights Your CA Privacy Rights Children's Online Privacy Policy Children's Online Privacy Policy Interest-Based Ads Interest-Based Ads Terms of Use Terms of Use Contact Us Contact Us. What Would You Do? Dow Sinks Day After Election; Obama to Inherit Bad Economy By BETSY STARK.

Close More from Zunaira. Click Here to See How Your Stocks Are Doing With the closely watched presidential election over, the business world is now bracing itself for the new reality of a Democratic-controlled Washington. Help for the Jobless? Results and Breakdown Explainer: How Exit Polls Work Election Map: State-by-State Results Electoral College Calculator: Reaching Poll Tracker: See How They Run Complete Vote Election Coverage Stimulus Round Two Many economists believe to that to boost the sagging economy, Congress will pass another economic stimulus package, perhaps even before the new president takes the oath of office in January.

Who Will Be Good for Taxes? Cars, Energy and More Jobs The ailing auto industry will also be a challenge facing the new president. Social Security Kent Smetters, a professor at the University of Pennsylvania's Wharton School and former deputy assistant secretary of economic policy at the U.

That bailout, he said, "is just an appetizer for the real deal to come. A Global Economy Lewis Alexander, chief economist at Citigroup Inc.

One key issue for the next president will be "getting the financial system back so that it is actually contributing to growth," he said "In the last four weeks the situation has moved from what was a U.

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