Have Markets Priced the Presidential Campaign?

It is our sense the conventional wisdom has assumed an Obama victory in November. The polling shows a much closer race, in fact, a dead heat. Romney has opened a 10 point lead among independents, who, on the margin, will ultimately decide on the next President.

Here is Politico on their Battleground Poll,

The former Massachusetts governor has opened up a 10-point lead, 48 percent to 38 percent, among independents in a poll conducted Sunday, April 29 through Thursday, May 3 and a 6-point lead among those who describe themselves as “extremely likely” to vote in November. Obama led Romney by 9 points overall in POLITICO’s February’s poll.

But there are suggestions that these numbers are extremely fluid: Obama holds double-digit leads over the presumptive Republican nominee on issues such as who will better handle foreign policy and who will stand up for the middle class and on “sharing your values.” But enduring concern about the economy — by far the most important issue to voters — keeps the president in a tenuous position despite employment numbers that show slight but steady improvement.

We also think the markets will celebrate a Romney victory. This is not a political statement but our market opinion. It’s going to be an interesting campaign.

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