m*******y
发帖数: 904 | 1 【 以下文字转载自 Chinook 俱乐部 】
发信人: marchjuly (marchjuly), 信区: Chinook
标 题: Election 2012 (from Merrill Lynch)
发信站: BBS 未名空间站 (Tue Aug 21 20:46:48 2012, 美东)
Election 2012:
Obama leading the polls, but watch the economy
Most polls currently show President Barack Obama with a modest but steady
lead over Republican presidential candidate Mitt Romney. However, the next
three months are critical, and a slowing economy could cause this lead to
narrow or reverse. US GDP growth slowed from 4.1% in 4Q11 to 2.0% in 1Q12 to
1.5% in 2Q12, and our Economics team’s below-consensus outlook
incorporates further deceleration in growth to 1.3% in 3Q and 1.0% in 4Q, as
uncertainty around the fiscal cliff adds to the drag from the European
crisis. The resulting negative impact on confidence as voters cast their
ballots could result in a Romney victory.
GDP and political cycle more in sync this time
Historically, the economic cycle has been a more important driver of stock
returns and corporate profits than has been the political cycle. However,
given the magnitude of the fiscal cliff and dwindling options for an
impactful policy response, the political cycle and the economic cycle could
be much more intertwined this year. Lowering the fiscal deficit toward
sustainable levels is certainly desirable for the long term, but large
spending cuts at this point in the cycle could also serve to increase the
near-term probability of a recession.
Election implications for the market
While we still forecast modest upside for the S&P 500 from current levels
for the remainder of the year, the probability of a recession is elevated by
the uncertainty surrounding the fiscal cliff. Given our outlook for limited
upside and the relatively low cost of S&P 500 put options, investors may
want to consider adding downside protection at these levels.
A deep dive on sectors and industries
The sectors and industries most directly impacted by the election outcomes
are
likely to be Health Care and Defense (the most government-exposed) where an
Obama win would likely benefit Health Care stocks, and a Romney win would
likely benefit Defense stocks. Moreover, the potential for lower tax rates
and a
more relaxed regulatory backdrop under Republican leadership could benefit
stocks with high dividend yields, as well as regulated industries such as
Telecom,
Utilities, Financials and For-Profit Education. Under Republicans, potential
for
reduced tax rates could also lift higher-end consumer stocks.
Some historical election fun facts
„ Annual large cap stock returns under Democratic presidents have
averaged
twice that of returns under Republican presidents (15% vs. 7%); and nearly
triple for small caps (22% vs. 8%).
„ Stocks have performed best under a Democratic President with a
Republican
Congress and worst under a Republican President and Republican Congress.
„ Stocks have performed best during the third year (not the fourth) of
a
president’s term, and worst in the second year. |
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