It’s never too early to start thinking ahead to the potential impact an election can have on the markets, and a look at some important numbers shows that investors may want to consider what impact President Barack Obama’s re-election will have on stock prices. Here’s why: GOP candidate Mitt Romney is generally seen as the only candidate capable of beating Obama in the fall, yet several factors are weighing against him even if he fends off Newt Gingrich’s latest surge. 1. Conservative Disaffection
Although conventional wisdom says that a moderate Republican is more likely to win a general election than a conservative, recent history has shown that GOP candidates can’t win without enthusiastic conservative support. Ronald Reagan won as a conservative candidate twice, and so did George W. Bush — although it’s a matter of debate how much Bush actually followed conservative principals once he was in office. On the other hand, Republicans who ran as moderates — George H.W. Bush (1992) and John McCain (2008) — were both soundly beaten.
Today, we see moderate Republican Mitt Romney running into similar problems as his predecessors. This is evident not just in polls, but also in Rick Santorum’s Iowa victory, the steady improvement in Ron Paul’s polling numbers, and the exit polling data from South Carolina showing conservatives flocking to Gingrich. Read