Pretty much everyone is predicting a Barack Obama victory tonight.
And stocks have enjoyed a nice rally today so far. Overnight overseas markets were mostly in a partying kind of mood, the TSX is vaulting higher and the Dow is trotting upwards.
A lot of talking heads are attributing the positive peppiness to the election, and Obama’s near-certain victory. Perhaps Obama is seen as a better bet to save the world’s economy than John McCain. Perhaps there will be a lower chance of another 9/11 with a guy like Obama for president. Or perhaps people in every other country but the U.S. just like the guy a whole lot more and just feel happy that some guy that doesn’t seem like another oldtime cold warrior is about to take over. (In the U.S. Obama is only liked a little more than McCain, according to the polls. Maybe that’s why the rally there is a bit smaller.)
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So people might just be investing their warm feelings about the result they expect in the stock market, driving it up from its recently depressed level.
But will that leak into the ag commodity markets? Will canola, soybeans, corn, wheat, beef and pork all get expecting-Obama bounces? I don’t think we know the guy’s policy positions on wheat, canola corn and soybeans. If he believes in a-chicken-in-every-pot politics, that’d be good for both the meat and feedgrain complexes. But if he believes in trade protectionism and shutting the border to Canadian pigs and cattle (already happening with COOL), then the next few years might be not so good.
Regardless, let’s hope for at least a one day election rally, just so we can say we experienced the Obama bounce.
