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Barron’s reports the Dow Jones Industrial Average has dropped over 300 points this morning following President Obama’s re-election, “its lowest intraday level since Aug. 3. Ouch.” That’s 2.3 percent.
It also happened in 2008 after he won, the article says…
As one trader reminds us, the market also sold off hard when President Obama was first elected. Granted, it was an entirely different environment back in 2008 — a crisis environment. But I find it pretty amusing nonetheless. President Obama has been a friend of the stock market — a pretty amazingly good friend if you start the clock in January 2009 and end it this week. His first term was a great time to buy stocks if you had some powder dry. No matter — the threat of the fiscal cliff is apparently enough to get investors genuinely worried.
Over at the Wall Street Journal post-election live blog, they say this is “just investors unwrapping their Christmas presents early”…
Am I nuts, or is this selloff just basically a big sell-on-the-news, profit-taking, lock-in-the-gains type event?
I mean, stocks have had a really good year, all things considered. Profits have been shrinking, Europe remains an albatross around the global economy’s neck, and the Fed’s gone all-in.
So looking at a still split federal government, the fiscal cliff, etc., why not just take your winnings now, and take the current, known tax rates?