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The Ultimate Presidential Election Guide For Investors

Tyler Durden's picture




 

With 20 days left to the big day and the candidates seemingly in a tighter race than many expected it seems appropriate to look at how the equity market is and will be positioned for a potential changing of the guard if Mitt Romney wins or if incumbent Barack Obama remains in charge. Credit Suisse has created a comprehensive 'cheat-sheet' outlining key issues for the election for each candidate, the sector impact of an Obama or Romney victory, and the extent to which that impact is already factored into current market prices. Everything you wanted to know about gaming the outcome of the election but were afraid to ask.

Election year returns are high when political parties do not switch power.

 

Sector Impacts

 

  • Healthcare: We expect healthcare to continue to climb up on the list of concerns by most voters. Given Obama’s first-term focus on universal healthcare and the Affordable Care Act (ACA), the debate around healthcare reform will continue to drive the sector. In addition to reform, we would not be surprised to see more dialogue around Medicare and Medicaid, drug pricing, biogenerics legislation, and preventive medicine.
  • Energy: The regulation of offshore drilling after Macondo and fracking remain hot button issues, similarly approval of the cross border Keystone XL pipeline. The jobs/taxes imperative is encouraging both sides to focus on domestic drilling but the pace would likely be faster under a Romney win. Other important issues revolve around oil industry taxation and the response to instability in the Middle East.
  • Clean Tech: While both parties agree that increasing energy security is important and can be used as a tool for job creation, both differ dramatically on their views supporting alternative energies. We believe most stocks currently reflect a Romney victory and would expect an Obama victory to be a positive surprise for the sector.
  • Financials: If Obama retains his seat in the White House, we expect this largely to be neutral for financials. A Romney victory, however, would be viewed as positive. While we do not expect a repeal of the Dodd-Frank Wall Street Reform and Consumer Protection Act, a more “balanced” approach to bank supervision and future bank reforms are likely to be viewed favorably. Crop insurance-related measures, dividend tax increases, and the origination of government guaranteed student loans are other hot topics.
  • Educational Services: The regulatory overhaul in the federal student financial aid program, we believe, has negatively impacted sector fundamentals and resulted in sector stock prices moving down dramatically over the past two to three years. We believe the sector already reflects the impact of an Obama victory, and we see further downside risks. A Romney victory would likely help the shares initially, but continued budget concerns could weigh over time.
  • Consumer: Consumer demand, in our view, may be affected materially depending on which candidate wins. To two primary differences are the impact of higher taxes on spending under Obama, and the potential for lower costs under Obama’s healthcare plan. We highlight the potential for a general sentiment trade around the election, as well.
  • Capital Goods: In defense, current valuations and stock action lead us to believe the market is already discounting a more benign scenario under an Obama win (and actually a Romney win as well). Whereas a Romney victory should prove to be beneficial for Machinery, Engineering & Construction, Environmental & Industrial Services stocks.

 

 

Individual Stock Impacts

 

Key Issues And Candidate Positions

 

CS Election Impact

 

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Wed, 10/17/2012 - 11:56 | 2898157 Lost Wages
Lost Wages's picture

IBM and STJ are in some pain today. Is there anything Rombama can do to keep them from closing in the red? If anything is in the red, consumer confidence might go down and people will be too depressed to vote.

Wed, 10/17/2012 - 11:58 | 2898165 SilverTree
SilverTree's picture

"Luke, at that speed do you think you can pull out in time!"

Wed, 10/17/2012 - 13:26 | 2898417 redpill
redpill's picture

It'll be just like Bernanke's Canyon back home.

Wed, 10/17/2012 - 13:41 | 2898462 icanhasbailout
icanhasbailout's picture

stay on inflation target... stay on inflation target

Wed, 10/17/2012 - 13:58 | 2898514 Lohn Jocke
Lohn Jocke's picture

Use the Fed Luke!

 

...It's the Fed that binds the galaxy together.

 

I feel unclean just typing that...

Wed, 10/17/2012 - 14:55 | 2898673 knukles
knukles's picture

OK

Tell me

Who created this list of horseshit that'll never ever happen?

Wed, 10/17/2012 - 15:48 | 2898906 NotApplicable
NotApplicable's picture

Funny, I was just scrolling down to post "Sucks to be the Tyler that had to write this shit!"

Wed, 10/17/2012 - 13:59 | 2898517 MillionDollarBogus_
MillionDollarBogus_'s picture

Tyler,

How about some more threads about obesity, and ways Americans can eat & exercise properly, to keep the importance of health care front & center.

 

Wed, 10/17/2012 - 12:15 | 2898205 Silver Bug
Silver Bug's picture

The end result regardless of who gets elected will be the same.

Wed, 10/17/2012 - 12:28 | 2898243 fourchan
fourchan's picture

a victory for our masters, the bankers.

Wed, 10/17/2012 - 14:01 | 2898526 MillionDollarBogus_
MillionDollarBogus_'s picture

Silver,

Agreed.  The 2 parties are driving this economy into the ground.

Same ends result - slightly different agenda.

Wed, 10/17/2012 - 11:56 | 2898158 Midas
Midas's picture

I am not going to sift through all this because I think the manipulation trumps all of this "analysis."  I just need to know when the PTB are going to pull the rug....

Wed, 10/17/2012 - 12:56 | 2898327 walküre
walküre's picture

The moment Romney magically reduces the debt by 8 trillion and his Fed appointment raises rates drastically so that "banks can earn more on their deposits". Then crashing everything in its wake, making millions poor overnight. Followed by the greatest orgy of purchasing everything in sight for fractions of a cent on the dollar to establish Romney & friends as the landlords and factory owners over the next decades.

Romney & friends are heavy in cash. They're liquid. They won't accept a destruction of their cash via currency dilution.

Whatever his "plan" is, I'm sure it will benefit himself and his friends more than anybody else.

Very simple.

Wed, 10/17/2012 - 13:09 | 2898379 Midas
Midas's picture

What do you mean by "raises rates drastically?"  I think this ZIRP has gone on long enough and would like to get a little scratch for my savings.  I am not sure whose side you are for.

Wed, 10/17/2012 - 14:02 | 2898529 walküre
walküre's picture

You're small fry or else you wouldn't be posting here. Same for everyone else.

Whatever "savings" you think you have and whatever you think you're supposed to be "earning" on top of your savings, you are not going to keep up with the guys who are sitting on billions in cash or cash equivalents when they're done crashing it all.

The term "controlled demolition" will get a whole new meaning.

 

Wed, 10/17/2012 - 14:45 | 2898651 Midas
Midas's picture

Not so small when I drop my pants.

---Franklin Delano Bluth

So you think the ZIRP of the Bernanke is preferable to a rise in rates?  And you don't need to put "savings" in quotes.  They are real and at this point they are in a shiny form.  I would prefer to employ them in something more productive, but I don't know what that is right now.

Wed, 10/17/2012 - 13:13 | 2898390 helping_friendl...
helping_friendly_book's picture

Good but, terrifying points.

I never thought about it that way. That seals it for me.

4 more years.

Wed, 10/17/2012 - 14:20 | 2898586 Snoopy the Economist
Snoopy the Economist's picture

Interest rates can NOT be increased much more than 1% - interest payments on teh $16T are already $480B per yr - every 1% increase in rates is an additional $160B per yr (and climbing since the debt clock never stops).

Wed, 10/17/2012 - 14:34 | 2898613 Vince Clortho
Vince Clortho's picture

Since Debt is good, that means things will just keep getting better and better.

Start planning for that vacation to New Zealand so you won't have to wait in line.

Wed, 10/17/2012 - 16:04 | 2899022 lasvegaspersona
lasvegaspersona's picture

per Jacques Reuff, our current system, because of the sterilization of gold and the fact it (gold) does not perform is:

"the outcome of an unbelievable collective mistake which, when people become aware of it, will be viewed by history as an object of astonishment and scandal."

thus we will get what is coming no matter who gets elected. Romney will do his best but I hope he realizes what is hiding underneath all those analyses is a very bad monetary system about to die. He had better have a helluva speech ready for that day.

Wed, 10/17/2012 - 13:17 | 2898396 whotookmyalias
whotookmyalias's picture

+100

Wed, 10/17/2012 - 12:02 | 2898173 lolmao500
lolmao500's picture

Obama needs to be elected so he gets all the blame for the economy going back to reality (crashing) so all the Obamabots cry like little bitches and realize how full of shit their God is.

Wed, 10/17/2012 - 12:31 | 2898191 Harbanger
Harbanger's picture

As long as there is a MSM, Obama will not be blamed for ANYTHING.  Crashing the economy will be used as proof that capitalism doesnt work.  What you need to "realize", is a crash under Obama is a perfect opportunity for the Statists to advance their cause by pushing thru reforms that we will NEVER undue.

Wed, 10/17/2012 - 12:21 | 2898219 GeorgeHayduke
GeorgeHayduke's picture

Yeah, it's ALL Obama's fault and the Democrats. Bush, Cheney, Clinton, Gore, Bush I, Quayle and Reagan along with the Goldman Sachs slime and other corporate lackeys that have filled all of these administrations have no hand in this collapse? You are a useful idiot for the owners if you believe this.

This collapse is imminent due to the greed and corruption, as well as the willful ignorance and stupidity of this entire culture. It truly is not worth saving, so a collapse is the natural outcome. Politics and simple-minded ideology do not matter at this point, except for the simple-minded.

Wed, 10/17/2012 - 12:27 | 2898236 lolmao500
lolmao500's picture

Did I ever say that?

Both are shills for the banks.

But during collapse, do you want Obamabots to blame Obama and his BS economics for it or do you want them to blame free-market and capitalism (which Romney is PORTRAYED to represent (even if he's NOT duh!) ??

Obama elected = stimulus package/bailouts blamed

Romney elected = free-market blamed

It comes down to this.

Wed, 10/17/2012 - 14:42 | 2898633 Vince Clortho
Vince Clortho's picture

Who gives a bloody flying fudge which political puppet gets blamed?

The Central Planners are hoping the muppets will play the blame game running around pointing fingers at one of the "political parties".

This will insure that no attention gets focused on the real perpetrators of this crime against humanity.

Large numbers of people need to get their heads out of their arses and take a peek at what is happening in the real world.

Jesus, there is still a lot of work to do.

Wed, 10/17/2012 - 16:09 | 2899049 NotApplicable
NotApplicable's picture

Not true. Free market will be blamed regardless.

Romney = "Too much regulatory slack, we need a Dem."

Obama = "Too much regulatory slack, we need more power."

You gotta do a better job "thinking" like an Obamabot.

Wed, 10/17/2012 - 12:10 | 2898194 Piranhanoia
Piranhanoia's picture

I can't imagine a more trustworthy source of political information than a bank.   Isn't this a rooter's propaganda piece?

Wed, 10/17/2012 - 12:17 | 2898208 Insideher Trading
Insideher Trading's picture

All you need to know about Obomney:

Both have promissed magic and if you vote for them they will solve traffic as well.

and unicorns.

Wed, 10/17/2012 - 12:18 | 2898210 BLOTTO
BLOTTO's picture

'candidates seemingly in a tighter race.'

.

Yes, exactly - is it really that close? Or the illusion that its close from our controlled MSM?

.

What can anyone really believe anymore.

IMO, i still say Obama is a lock.

Only because i think 'they' have something in store for the second term...

But thats only if you believe in astrology, sacred geometry and numerology - like they do. They have been following it for ages...

.

#44 4 4 more years.

 

Wed, 10/17/2012 - 12:59 | 2898342 Sixdeuce062
Sixdeuce062's picture

Plan A win and implement changes according to plan

Plan B lose and burn the mother down

Wed, 10/17/2012 - 16:06 | 2899033 NotApplicable
NotApplicable's picture

Yeah, I'm starting to tire of this push to make the "race" interesting. Why this Tyler would repeat the phrase without "denigrating" it with scare quotes...

Wed, 10/17/2012 - 12:20 | 2898217 disabledvet
disabledvet's picture

I think this site more than any other shows just how little will change in an economic sense should there be "regime change" (and yes, should Mitt win that is regime change folks.) there will be no gold standard with either candidate. There will be no true cut back in the size and scope of Federal largesse. There will be no fundamental change in energy policy or in how DC relates to Wall Street. Period. What there will be is a change in how the massive expansion in Al Qaeda is dealt with. A MASSIVE change in my view (which is being telegraphed already) to a much more aggressive posture should Romney win. And I think you might see...MAYBE...and certainly ideally...a change with how Government spies on us "in the name of fighting terror." we shall see. Mitt crushed the President last night...does it translate to votes more than it already has come November? Well...I think it was all the President could do not to start choking Mitt Romney on that stage last night...which should make for an interesting third debate. Maybe they'll actually fight each other!

Wed, 10/17/2012 - 12:29 | 2898245 BLOTTO
BLOTTO's picture

Even if Mitt gets in - nothing changes. The Agenda will continue.

 

The creek is polluted further up the stream then the President of the United States. We are NOT getting to the heart of the machine. You need to get right to the top tier and cut THAT beasts head off. Poking at the belly does fuckin shit.

.

Meet the New Boss

-same as the Old Boss.

~The Who, Wont get FOOLED again

.

Nothing new under the sun...

 

Wed, 10/17/2012 - 12:46 | 2898292 francis_sawyer
francis_sawyer's picture

Another Brick in the Wall ~ Pink Floyd's Roger Waters

~~~

http://whatreallyhappened.com/node/196243

Wed, 10/17/2012 - 12:50 | 2898309 centerline
centerline's picture

There are only two ways out...

1.  Implode the system.

2.  Let the system implode itself.

Fun times.

Wed, 10/17/2012 - 16:13 | 2899068 NotApplicable
NotApplicable's picture

Number one is no way out, as it results in infinite recursion (order from chaos (they continue to win)).

Number two will work once enough people walk away and stop supporting it. Of course, they believe it supports them, so... it's gonna take a while.

Wed, 10/17/2012 - 12:25 | 2898231 walküre
walküre's picture

Romney looked really weak last night. He won't stand a chance in the last debate either. His foreign policy credits are from a one year stint during college years when he was prosletyzing his Mormon garbage to the good people of France and then as successful financial rapist on his many trips to his offshore banking paradise in the Grand Caymans.

At this point, I'd say Obama has the election in the bag. But I wouldn't put money on anything Diebold has programmed.

Wed, 10/17/2012 - 12:30 | 2898249 centerline
centerline's picture

I am just waiting for some sort of foot-in-mouth moment or "news" to be released about one or the other.  Watching for the invisible hand.

Wed, 10/17/2012 - 12:48 | 2898302 walküre
walküre's picture

20 days to go, anything is possible. But if we believe that both parties/teams are bought and paid for by the same cartel / cabal and bowing to the same master, then that won't have to happen. Their candidate gets in either way. What strikes me as odd is that GS and other banks benefited the most from 4 years Obama/Bernanke but in the case of GS for example, they donated quite a bit more to the Romney campaign. Not that the amounts really matter anyway but are they suggesting support for Romney over Obama or are they just pretending?

The federal balance sheet has increased several trillion and at the same time, banks are having bigger profits than ever. Average Americans aren't richer by any stretch but the upper echelon is healthier than before the crash. And yet we're supposed to think that Obama is for the average American. His policies have helped the rich while at the same time, not starving the poor to death.

Much of that increase in the federal balance sheet is from absorbing the banks problems. Obama could have pointed that out last night but that would have just rubbed more people's noses into the scam and fraud. Not that Romney would have had a rebuttal to that anyway. He and his cronies are the major beneficiaries of Obama/Bernanke's bank-friendly policies.

Wed, 10/17/2012 - 12:58 | 2898325 centerline
centerline's picture

There is one component of this I still wonder about... otherwise I would be squarely in the camp that it does not matter.  That component is public perception of this election circus.  Lots of people still believe electing one guy versus another will mean that things will get better for them.  On one hand, we get more of the same (with Obama)... but a known  path that can be used for people to complain about and look forward to the next election when they can "finally get someone else."  On the other hand, if Romney gets in office the public will be expecting something new to happen... which we all know won't.  Hence, if Romney wins, the public might be at greater potential for finally losing faith in the two-party system than if Obama winds up re-elected.  It is on this hypothesis that I expect a Romney disaster to occur within the next 2 weeks.

Wed, 10/17/2012 - 13:06 | 2898366 walküre
walküre's picture

The banks are healthier than they were in 2008 and probably before then. Courtesy of the Fed and the UST. Balance sheet transfer from the banks to central bank to the UST. That is why the debt is so high. Stimulus spending is a minor part, welfare spending is a negligible amount compared to what the government owes for banker's failures.

My theory is that the bankers are supporting Romney because they've gotten all they could from Obama. Now they're healthy and prepared for the real crash and the 2nd act of the Greatest Depression. They are cash heavy and able to buy whatever they like on the cheap. They will not take losses due to inflation let alone hyperinflation. With cash they can benefit from a massive deflation. Romney seems to be their guy to make that happen. The cabal worked so hard to establish the perfect theft, they will not just watch to see their favorite FIAT evaporate to nothing.

Romney is hard times for America.

Wed, 10/17/2012 - 13:26 | 2898420 acetinker
acetinker's picture

Good point, CL.  However, I've been watching folks fall for this shit-show for 35-40 years now... and IT STILL WORKS!  Beginning to wonder about that "hundredth monkey" thing.

Anyway, JFK was the example for all his successors to consider- Do something for the people/against the bankers, and you WILL BE REWARDED thusly.

So, we can't expect any candidate of valor to seriously mount a challenge to the status quo anytime soon.  We're gonna have to do it.  Got any ideas you haven't shared?

Wed, 10/17/2012 - 12:32 | 2898252 francis_sawyer
francis_sawyer's picture

<=== I'll follow the advice of investing in the sectors on the graph based on a Red/Blue outcome

<=== Fuck that noise, I'll keep stacking until they hang all bankers, politicians, & PAC lobbyists

Wed, 10/17/2012 - 12:35 | 2898268 ParkAveFlasher
ParkAveFlasher's picture

Green arrow for the red arrow.

Wed, 10/17/2012 - 13:00 | 2898345 The Gooch
The Gooch's picture

Indeed, but who is "they"?

Wed, 10/17/2012 - 12:34 | 2898263 ParkAveFlasher
ParkAveFlasher's picture

I'm waiting for Wynter Benton to predict who wins, and betting the opposite way.

Wed, 10/17/2012 - 12:47 | 2898295 csmith
csmith's picture

What? No mention of what Romney might mean for the Fed?

Wed, 10/17/2012 - 13:00 | 2898348 alien-IQ
alien-IQ's picture

It never ceases to amaze me the amount of time and energy that goes into arriving at what is absolutely nothing more than a guess pulled straight out of the ass.

This article and all the related charts are nothing more than a mountain of meaningless gibberish to create the illusion of knowledge and insight.

You'd stand a better chance of accurately predicting what will happen by asking a magic 8 ball.

Wed, 10/17/2012 - 16:17 | 2899090 NotApplicable
NotApplicable's picture

No more amazing than your post getting junked!

I guess the facade is still real to some people.

Wed, 10/17/2012 - 13:14 | 2898392 alfbell
alfbell's picture

My life is going very well. That's all that matters.

Wed, 10/17/2012 - 13:58 | 2898513 syntaxterror
syntaxterror's picture

An Obama win = 4-year golf vacation.

 

Paid for by every sucker reading this blog.

Wed, 10/17/2012 - 16:19 | 2899096 NotApplicable
NotApplicable's picture

Man if that were true, I'd vote as many times as I could get away with!

Instead, I'll stick with the tried and true vote of NOTA.

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