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Stocks Recovering from ‘Obama Effect’…

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Since the day Barack Obama was elected President of the United States, the Dow Jones Industrial Average (DJIA) has been on a deep slide. The Dow closed election day at 9,625.28, then began a nearly daily descent, until it reached 7,552.29 at the closing bell on November 20. That’s a decline of 21.54% in just twelve days, and represents trillions of dollars taken out of the capital markets.

No big surprise there, given that President-elect Obama has promised to increase the Capital Gains tax by 33% (that’s just to start; his stated ultimate goal is a roughly 87% increase in the tax on your investment gains), move the US to a protectionist trade policy and increase regulation.

The "Obama Effect".

The 'Obama Effect'

The markets, however, appear to be starting to shake off the “Obama Effect”: beginning November 21 and continuing for the next five consecutive days, the DJIA has been making up ground, closing November 28 at 8,829.04. That’s more than halfway back to pre-Obama levels.

Could President-elect Obama’s recent comments that he is reconsidering his tax hikes and even contemplating allowing the Bush tax cuts to continue be responsible for some capital returning to the market?

Written by westcoastsuccess

November 28, 2008 at 6:50 pm

One Response

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  1. It seems since Obama has begun to have real conversations with those that understand the markets and the economy he is reconsidering some bad ideals that were a part of his campaign.

    ForexTradingSystemCentral

    November 29, 2008 at 8:41 pm


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