Elections and Markets

Physician's Money Digest, October15 2004, Volume 11, Issue 19

Kerry or Bush for the White House?Some financial pundits are saying that awin by President Bush would be goodfor stocks and a win by Senator Kerrywould be good for bonds. Others arguethat, since neither would be able to cutthe federal deficit, neither candidatewould be good for bonds. Faced withthe probability of a Republican-controlledUS House, Kerry most likelywould be hamstrung in any attempts toraise taxes or roll back the Bush taxcuts. If Bush wins but the Republicanslose the US Senate, the resulting politicalgridlock would make it hard for himto extend the tax cuts. The soothsayersalso note, however, that political gridlockis a situation that, historically, themarkets and businesses enjoy.