A recent CNNMoney survey found that 75% of money managers and investment strategists believe a Mitt Romney victory would lift U.S. markets. The survey also found that “many are also hoping for the GOP to gain control of both the House and the Senate.”
Leading up to the November elections, 80 percent of those surveyed agreed that the stock market will remain volatile and possibly get worse.
John Praveen, managing director and chief investment strategist for Prudential International Investments Advisers says investors are not sanguine about lawmakers’ ability to keep America from driving off the fiscal cliff:
“In case investors are not sufficiently convinced that policy makers andpoliticians are up to the task of handling the fiscal cliff in areasonably effective manner, financial markets are likely to again fallsharply, similar to the plunge around the debt ceiling debacle in 2011.”
Chase Investment Counsel President Peter Tuz was more direct:
“At this point, I think markets would appreciate a clear Republicanmandate. That provides the best chance for continued low taxrates. If investors see the likelihood of an Obama victory, coupledwith Democrats retaining control of the Senate, they will react bytaking advantage of the low tax rates that still exist, so a sell-off inmarkets would be a distinct possibility.”
The sputtering U.S. economic recovery, the European debt crisis, the slowing of growth in China, the need to cut government spending, and the looming expiration of the Bush tax cuts were cited as troubling economic signs for America’s financial future.