Stockmarket and the 2004 election
...eason to be optimistic no matter who won. If Democratic candidate John Kerry had won, the markets would have looked towards historical precedent, when a president was elected from the opposing party, which was a general rally of the stock market. Also, investors held the belief that a Kerry administration would help to reduce the budget deficit because traditionally, democratic administrations have made budget deficit reduction a priority. Another reason investors could have expected a rally was the “gridlock” factor, or when a democratic president is in power with a republican congress in session. Both business owners and investors consider this gridlock healthy for the economy because they believe in less government involvement. Prior to the election, the feeling was that if President Bush had won, the markets would rally since generally, business owners and investors favor a Republican president. They favor Republican presidents because they tend to be pro-business and favor a hands off approach towards business. The fact that having a Republican president with a Republican controlled congress only made it more appealing to investors and business owners. Looking at the trading during election day several factors came int...