# Why have the markets fallen on Obama's victory day? **URL:** \ **Category:** Miscellaneous and Personal Stuff I Must Share\ **Created:** [November 5, 2008, 5:47pm UTC](https://boards.straightdope.com/t/why-have-the-markets-fallen-on-obamas-victory-day/471305 "2008-11-05T17:47:51Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![NineToTheSky](https://avatars.discourse-cdn.com/v4/letter/n/b5a626/32.png) [@NineToTheSky](https://boards.straightdope.com/u/NineToTheSky)\ **Post date:** [November 5, 2008, 5:47pm UTC](https://boards.straightdope.com/t/why-have-the-markets-fallen-on-obamas-victory-day/471305/1 "2008-11-05T17:47:51Z")
[I read today](http://news.bbc.co.uk/1/hi/business/7711018.stm) > [@](#): > > No one knows how successful the new US president Barack Obama will be in tackling the US economic recession. > > But whatever happens, history suggests that US stock markets will prosper under his presidency. > > According to stock market historian David Schwartz, US markets have risen on average 10% in the first year of a Democratic presidency. In the first year of Republican presidency, they have risen less than 2%. > > And this differential is not confined simply to an initial, feel-good bounce. So why has the Dow Jones fallen today? ---
**Author:** ![Darryl\_Lict](https://avatars.discourse-cdn.com/v4/letter/d/7cd45c/32.png) [@Darryl\_Lict](https://boards.straightdope.com/u/Darryl_Lict)\ **Post date:** [November 5, 2008, 7:02pm UTC](https://boards.straightdope.com/t/why-have-the-markets-fallen-on-obamas-victory-day/471305/2 "2008-11-05T19:02:06Z")
Most probably because I jumped back into the stock market yesterday. I should just announce it here every time I do it so everyone can get there short sells in.🙂 ---
**Author:** ![cher3](https://avatars.discourse-cdn.com/v4/letter/c/da6949/32.png) [@cher3](https://boards.straightdope.com/u/cher3)\ **Post date:** [November 5, 2008, 7:19pm UTC](https://boards.straightdope.com/t/why-have-the-markets-fallen-on-obamas-victory-day/471305/3 "2008-11-05T19:19:26Z")
The explanation I heard was basically that now that the election is over, investors turned their full attention back to just how crappy the economy is right now. ---
**Author:** ![robby](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/robby/32/11048_2.png) [@robby](https://boards.straightdope.com/u/robby)\ **Post date:** [November 5, 2008, 7:21pm UTC](https://boards.straightdope.com/t/why-have-the-markets-fallen-on-obamas-victory-day/471305/4 "2008-11-05T19:21:03Z")
> [@NineToTheSky](#): > > [URL=“[BBC NEWS | Business | Could Obama be good news for shares?](http://news.bbc.co.uk/1/hi/business/7711018.stm)”]So why has the Dow Jones fallen today? It’s probably just a correction to yesterday’s market rise. You can’t judge anything about the market based on less than one day’s results. I wouldn’t worry about it. ---
**Author:** ![NineToTheSky](https://avatars.discourse-cdn.com/v4/letter/n/b5a626/32.png) [@NineToTheSky](https://boards.straightdope.com/u/NineToTheSky)\ **Post date:** [November 5, 2008, 7:28pm UTC](https://boards.straightdope.com/t/why-have-the-markets-fallen-on-obamas-victory-day/471305/5 "2008-11-05T19:28:47Z")
> [@robby](#): > > It’s probably just a correction to yesterday’s market rise. > > You can’t judge anything about the market based on less than one day’s results. > > I wouldn’t worry about it. I’m not worried. I just thought that everyone’s mood would be buoyant enough to buoy up the markets today. I assumed that reason would kick in tomorrow, but today: Obama’s in - let’s paaaarty. But not so. ---
**Author:** ![Cliffy](https://avatars.discourse-cdn.com/v4/letter/c/59ef9b/32.png) [@Cliffy](https://boards.straightdope.com/u/Cliffy)\ **Post date:** [November 5, 2008, 8:18pm UTC](https://boards.straightdope.com/t/why-have-the-markets-fallen-on-obamas-victory-day/471305/6 "2008-11-05T20:18:15Z")
IIRC, the market always drops temporarily when Democrats are elected. Which seems proof to me that markets are not always good predictors of economic health, because the economic history quoted in the OP shows that, with the exception of Carter (which gets an asterisk), the economy performs substantially better under Democrats than Republicans. What is really going on is the markets **are** good predictors of whether the people making the trades are going to be able to run roughshod over their clients and generate huge commissions without oversight, or whether the only way to be personally successful is to do a good job for their clients, and they’d rather the former. But everyone else would rather the latter. –Cliffy ---
**Author:** ![Dangerosa](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Dangerosa](https://boards.straightdope.com/u/Dangerosa)\ **Post date:** [November 5, 2008, 9:32pm UTC](https://boards.straightdope.com/t/why-have-the-markets-fallen-on-obamas-victory-day/471305/7 "2008-11-05T21:32:34Z")
Markets rise on anticipation of good news and fall upon the realization of the good news. The reverse happens when the anticipation of the news is seen as bad. ---
**Author:** ![UncleRojelio](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/unclerojelio/32/3160_2.png) [@UncleRojelio](https://boards.straightdope.com/u/UncleRojelio)\ **Post date:** [November 5, 2008, 9:37pm UTC](https://boards.straightdope.com/t/why-have-the-markets-fallen-on-obamas-victory-day/471305/8 "2008-11-05T21:37:29Z")
You people are all screwed until I am forced to sell all of the APPL shares I am holding, at which point the market (and APPL) will rise like a rocket. ---
**Author:** ![Marley23](https://avatars.discourse-cdn.com/v4/letter/m/45deac/32.png) [@Marley23](https://boards.straightdope.com/u/Marley23)\ **Post date:** [November 5, 2008, 9:38pm UTC](https://boards.straightdope.com/t/why-have-the-markets-fallen-on-obamas-victory-day/471305/9 "2008-11-05T21:38:10Z")
Not only was there a rise yesterday- the markets have had a good few days, probably expecting this news. So for some people that would make today time to “lock in gains” or “take profits,” also called selling. ---
**Author:** ![pulykamell](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pulykamell/32/3166_2.png) [@pulykamell](https://boards.straightdope.com/u/pulykamell)\ **Post date:** [November 5, 2008, 9:51pm UTC](https://boards.straightdope.com/t/why-have-the-markets-fallen-on-obamas-victory-day/471305/10 "2008-11-05T21:51:27Z")
> [@Marley23](#): > > Not only was there a rise yesterday- the markets have had a good few days, probably expecting this news. So for some people that would make today time to “lock in gains” or “take profits,” also called selling. Yeah, profit-taking would seem to be the most logical reason. Or you can say the market is correcting itself slightly for overvaluing an anticipated Obama victory with the market run-up in the last week or so. Hell, you can make up reasons no matter which way the market moves. I don’t think, very short term, there is always a clear reason why a market moves the way it does from day to day. But I’m not an economist. ---
**Author:** ![D\_Odds](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/d_odds/32/2882_2.png) [@D\_Odds](https://boards.straightdope.com/u/D_Odds)\ **Post date:** [November 5, 2008, 10:11pm UTC](https://boards.straightdope.com/t/why-have-the-markets-fallen-on-obamas-victory-day/471305/11 "2008-11-05T22:11:32Z")
Wall Street itself is a pretty Republican domain (surrounded by the rest of the Democratic city). Lots of managers and traders would not react kindly to a president-elect who has vowed to increase their tax rates (\> $250,000 per annum income). Also, we do not yet have a Democratic president. We have a Democratic president-elect. So maybe the markets are falling to make it easier to hit that 10% when President-elect Obama takes office. In the end, the markets fall because more people sold than bought today. Given the bad news constantly spewing from every industry across the board, that is not surprising. Everyone is revising earnings downwards (even companies which had a great year, like Marvel Entertainment), layoffs abound, and retail sales are in the toilet and there is no expectation of a holiday save. ---
**Author:** ![PunditLisa](https://avatars.discourse-cdn.com/v4/letter/p/4af34b/32.png) [@PunditLisa](https://boards.straightdope.com/u/PunditLisa)\ **Post date:** [November 5, 2008, 10:17pm UTC](https://boards.straightdope.com/t/why-have-the-markets-fallen-on-obamas-victory-day/471305/12 "2008-11-05T22:17:50Z")
There’s no way to know, of course, but I really believe that had McCain won, there would have been riots. Seriously. I’m talking nationwide riots, with looting and stuff. So I think a 400 point drop is nothing to what it would have been had the results been different. We’ll never know. ---
**Author:** ![PunditLisa](https://avatars.discourse-cdn.com/v4/letter/p/4af34b/32.png) [@PunditLisa](https://boards.straightdope.com/u/PunditLisa)\ **Post date:** [November 5, 2008, 10:21pm UTC](https://boards.straightdope.com/t/why-have-the-markets-fallen-on-obamas-victory-day/471305/13 "2008-11-05T22:21:18Z")
And to clarify, I’m not saying there would have been riots because the blacks would have rioted. I’m saying there would have been riots because Obama supporters, seemed to be so emotionally connected to the election. I mean we had people here who’d _weep_ when he’d speak. I just don’t think the country would have handled another Republican victory very well because they would have been so suspicious that it was a stolen election. ---
**Author:** ![Marley23](https://avatars.discourse-cdn.com/v4/letter/m/45deac/32.png) [@Marley23](https://boards.straightdope.com/u/Marley23)\ **Post date:** [November 5, 2008, 10:21pm UTC](https://boards.straightdope.com/t/why-have-the-markets-fallen-on-obamas-victory-day/471305/14 "2008-11-05T22:21:21Z")
Jobs report Friday, also. I’d been incorrectly saying it was due last week - I might’ve been thinking of the broader 3Q report. But the Labor Dept.'s October report is due out Friday and with a lot of job losses expected, people may have wanted to get to the sidelines early. It’s definitely hard to explain one day’s movement for the whole market. Individual factors stand out but figuring out the mix is difficult. ---
**Author:** ![pulykamell](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pulykamell/32/3166_2.png) [@pulykamell](https://boards.straightdope.com/u/pulykamell)\ **Post date:** [November 5, 2008, 10:23pm UTC](https://boards.straightdope.com/t/why-have-the-markets-fallen-on-obamas-victory-day/471305/15 "2008-11-05T22:23:03Z")
> [@D\_Odds](#): > > Wall Street itself is a pretty Republican domain (surrounded by the rest of the Democratic city). Lots of managers and traders would not react kindly to a president-elect who has vowed to increase their tax rates (\> $250,000 per annum income). Yeah, but to be devil’s advocate, wouldn’t a Democratic victory (which looked pretty solid over the last week) have already been priced into the market? (Hence the up on anticipation/down on news adage.) Sure, it wasn’t a foregone conclusion, and I was biting my nails until the very end, but the punters surely were betting on an Obama victory, and, hence, that should theoretically be reflected in the market’s movements. ---
**Author:** ![FallenAngel](https://avatars.discourse-cdn.com/v4/letter/f/5daacb/32.png) [@FallenAngel](https://boards.straightdope.com/u/FallenAngel)\ **Post date:** [November 5, 2008, 11:09pm UTC](https://boards.straightdope.com/t/why-have-the-markets-fallen-on-obamas-victory-day/471305/16 "2008-11-05T23:09:04Z")
A few reasons I saw bandied about today have already been touched on, but here are the contributors I recall seeing: Nerves about the jobs report coming out on Friday Profit taking Nerves about the debt Obama is inheriting, what he’ll do as a stimulus package and his likely taxation, regulation expansion and union bolstering proposals negatively impacting major businesses like finance and pharma. The jitters will stabilize between now and 01/20, but I anticipate a major downturn before the end of his first year. ---
**Author:** ![rowrrbazzle](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/rowrrbazzle/32/414_2.png) [@rowrrbazzle](https://boards.straightdope.com/u/rowrrbazzle)\ **Post date:** [November 5, 2008, 11:09pm UTC](https://boards.straightdope.com/t/why-have-the-markets-fallen-on-obamas-victory-day/471305/17 "2008-11-05T23:09:37Z")
The question is answered in the OP’s quote. > [@](#): > > No one knows how successful the new US president Barack Obama will be in tackling the US economic recession. ---
**Author:** ![Caldazar](https://avatars.discourse-cdn.com/v4/letter/c/8e8cbc/32.png) [@Caldazar](https://boards.straightdope.com/u/Caldazar)\ **Post date:** [November 5, 2008, 11:25pm UTC](https://boards.straightdope.com/t/why-have-the-markets-fallen-on-obamas-victory-day/471305/18 "2008-11-05T23:25:01Z")
It’s probably just an ordinary market fluctuation to return to a more regular short-term pricing level. The valuations were starting to creep up a bit over the past week and a half. ---
**Author:** ![T\_SQUARE](https://avatars.discourse-cdn.com/v4/letter/t/9de053/32.png) [@T\_SQUARE](https://boards.straightdope.com/u/T_SQUARE)\ **Post date:** [November 5, 2008, 11:29pm UTC](https://boards.straightdope.com/t/why-have-the-markets-fallen-on-obamas-victory-day/471305/19 "2008-11-05T23:29:18Z")
Yeah, I’m pretty sure an Obama victory (for better or worse) has been priced into the market for a couple of weeks. ---
**Author:** ![ParentalAdvisory](https://avatars.discourse-cdn.com/v4/letter/p/53a042/32.png) [@ParentalAdvisory](https://boards.straightdope.com/u/ParentalAdvisory)\ **Post date:** [November 6, 2008, 1:37am UTC](https://boards.straightdope.com/t/why-have-the-markets-fallen-on-obamas-victory-day/471305/20 "2008-11-06T01:37:04Z")
> [@rowrrbazzle](#): > > The question is answered in the OP’s quote. The quote is an opinion of why it went down, but doesn’t inherently prove that was the reason. The markets are fickle for a variety of reasons, but financial news outlets almost always attribute the reason for the rise or fall in the markets for the day to the most popular headline of that day. Good or bad. We’ve had markets up for profits made by Walmart that day. :rolleyes: We’ve had markets up due to a fed rate cut that day. :rolleyes: We’ve had markets down due to a fed rate cut that day. :rolleyes: You get the point. The markets are not rational, and the reasons for it being up or down that day is only for the infotainment outlets to have something to talk about. Not one bit of it matters. [Next page](https://boards.straightdope.com/t/why-have-the-markets-fallen-on-obamas-victory-day/471305.md?page=2)