10/9/2012 7:24 PM ET|
Stocks for an Obama or Romney win
Tech stocks and midcaps: Winners with tax cuts
U.S. companies have more than a trillion dollars in cash overseas, which they're reluctant to bring home for tax reasons, says Andrew Busch, a public policy strategist at BMO Capital Markets. The money has already been taxed abroad. But under U.S. tax rules, it would get taxed again if it made the trip home.
Obama has suggested he'd take steps to make it easier to bring the money back. Romney says more definitively that he wants to eliminate taxes on repatriated funds quickly, though he has restricted himself to not making tax cuts that raise the federal deficit.
This change would be a huge benefit to tech companies, one of the sectors with the most money abroad. Apple (AAPL), Microsoft (MSFT), Cisco Systems (CSCO), Google (GOOG) and Oracle (ORCL) each have tens of billions of dollars sitting in foreign accounts. "They would be major beneficiaries of a Romney victory," says Busch. (Microsoft is the publisher of MSN Money.)
Busch also believes Romney's desire to cut corporate taxes and tax exemptions would help small and medium-sized companies. The reason: "They don't have the legions of tax attorneys to take advantage of all the exemptions," he says. "If we get Romney as president, these stocks would outperform," he says.
Be careful what you wish for
But what should we expect stocks to do overall do under either contender?
Wall Street obviously prefers Romney. And more than 100 CEOs recently surveyed by Wells Fargo said they expect a better business environment and less regulation under Romney.
But these folks should be careful what they wish for, if history is any guide. Since the 1930s, the economy, stocks and company profits have all posted higher gains during Democrats' administrations.
But politics and investing being as confounding as they are sometimes, that's not the end of the story. History also shows that on average a victory by a challenger, regardless of party affiliation, generates much stronger stock market gains than an incumbent win, says Citigroup strategist Tobias Levkovich. That's true for both the first year of office and during the full term.
Unfortunately, though, the worst outcome is also the most likely: Romney or Obama as president, with a divided Congress -- meaning something like we have now, with a House controlled by Republicans and a Senate dominated by Democrats.
Since 1901, the average stock gain in the first year under a Republican president with mixed Congress is -1.7%, says Wells Fargo. A Democratic president and mixed Congress has produced average first-year gains of just 0.2% for the S&P 500.
The best result for investors, according to history, would be a re-election of Obama and a Republican takeover of Congress. A similar scenario has happened twice -- in 1933 and in 1997 -- and those were two great years for stocks.
- Find on Bing: Dodd-Frank financial reforms, Sarbanes-Oakley reform legislation and Affordable Care Act.
At the time of publication, Michael Brush owned or controlled shares of the following company or fund mentioned in this column in his personal portfolio: JPMorgan Chase.
Michael Brush is the editor of Brush Up on Stocks, an investment newsletter. Click here to find Brush's most recent articles and blog posts.
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You had that from January 5th 2007 until January of 2011 and what did we accomplish? $16 trillion dollar deficit, 5 million loss in employed citizens, 43 months of 8.1% or higher unemployment, 23 million unemployed or underemployed citizens, 12 million illegal immigrants, and a health care bill "we have to pass to find out what is inside". Nice. Yet we can't be bothered to balance the budget or even pass one? The whole lot of them should be tossed in the next two election cycles (both parties) and new blood hired.
What's best for them? How about legislators who work for us for a change instead of for themselves?
Economy has done better historically under Democrats....................
Where do you people get your information ?
Breaking News - CNN, MSNBC, NBC and CBS have not yet confirmed the story, but it is believed by many that George W Bush is not running for President.
Why is the perception that Republicans are the main culprits of war mongering?
World War 1 - President Woodrow Wilson, Democrat
World War 2 - President Franklin Roosevelt, Democrat
Korean War - President Harry S. Truman, Democrat
Viet Nam - President John F. Kennedy, Democrat - Lyndon Johnson, Democrat
Desert Storm - President George H. Bush, Republican
Iraq - President George W. Bush, Republican
Washington Examiner -
Media Loved Obama to Death.
On Sept. 12, the day after mobs ransacked American embassies, burned the flag and Obama in effigy, and killed one Marine, two Navy SEALs, and one ambassador, NBC's Chuck Todd took to the air almost in shock and seemingly tearful, because Romney critiqued an official in Cairo who apologized for provoking the riots, citing a barely-seen YouTube video as the pretext for the violence. Voice shaking, he channeled the shock on the part of the White House (which later itself condemned the apology).
For days after, Romney's "mistake" was the story. On Sunday, after a week in which Obama was burned in effigy on several continents and his Middle Eastern policy exposed as a failure, he lost his best (perhaps his sole) campaign issue, and questions were raised about criminal negligence. But Chris Cillizza of the Washington Post said that Mitt Romney had had "the worst week in Washington." Obama's failures had turned out to hurt Romney, most of the press corps agreed.
Obama had seen that his friends would protect him, and so he believed he could mail it in Wednesday, but this was the venue that could not be spun. No filter. No edits. No choosing what to put in or leave out. No shaping of the story. Just the story itself, rolled out in real time, sans narration, before 70 million American voters, undoing six years of hype and hysterics. It revealed one small, not all that keen academic, having been inflated by the narrators beyond all recognition, dissolving before everyone's eyes.
THE MAIN STORY SHOULD BE OBAMA LIED ABOUT LIBYA!
COVER UP! AMERICAN FREEDOM AND SECURITY AS RISK!
you liberals worried about big bird and obama deathcare and
soylandra and green energy should focus on more important things!
stupid obama leeches worried about cell phones and obama money!
OBAMA hasn't brought any charges on any wall street banks or people
but he's been tough on wall street? yeah he took their money!
when Bush left office the gas costs half of what it costs today??
when Bush left office the deficit was 6 trillion less than what it was today?
when Bush left office unemployment was a little over 6%
I'll take those numbers today.
The Dow has fallen below the 20 day moving average, a move it has been trying to make since Aug 30. It has been fickle due to the Feds and the result of the debate, giving it a temporary shot in the arm. It wants to correct like it should and maybe now it has the momemtum to do so.
If thats true, it will happen just in time for the election which will not be a good sign for Obama, but will be a plus for Romney. The Trend is still a BUY, but the indicators are turning negative and of course anything can happen at any time, no guarantees of any sort.
We'll just have to see how this plays out.
Obama is leading us to a path of destruction, and another four years of Obama and American as we once knew it will not be recognized!
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