Stock market investors betting on Romney win

CNBC:

With just 100 days left until the U.S. presidential election, investors are beginning to make bigger bets on which candidate will carry the day.

 One analysis concludes that last week's sharp three-day market surge can only mean that Wall Street is banking on a victory from Republican Mitt Romney. 

That's the logical interpretation one can draw from a rally amid conditions that otherwise would demand a selloff, Morgan Stanley chief U.S. equity strategist Adam S. Parker said in an analysis that asserts there is no other reason now to like stocks than a Romney win. 

"The problem is that it’s impossible to be bullish and right for the right reasons," Parker said in a note to clients in which he reiterated his 2012 price target for the Standard & Poor's 500 [.SPX 1385.30 -0.67 (-0.05%) ] at 1,214, which would mark a 12 percent drop from the current level. 

"Nearly every day someone expresses surprise that our base case is for the equity market to be down by 10-15 percent. Why is this so hard to believe? The market has had eight 10 percent down moves in the last 12 years," Parker said. "We think a better question is why more people don’t forecast that the next 10-15 percent move is down than up?" 

Parker cites weak earnings and the likelihood that central bankers won't be able to continue to save the day as bolstering the case against equities. The near-zero interest rate policies from the Federal Reserve and now theEuropean Central Bank, in fact, are weakening the outlook for stock multiples, he said. 

The conclusion Parker draws is that investors are betting that Romney will unseatPresident Obama and bring a more business-friendly environment to the White House.
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The current polling gives Obama a better shot than I would give him.  I think that is because the pollsters are over sampling Democrats and they are still using registered voter models which also favor Democrats.  Based on current conditions, the current Congressional generic ballot which favors the GOP, I think a win by Romney with about 52 percent of the vote is a reasonable assumption, but most of the pollsters are not there yet.  It is interesting that some investors are though.

The media still appears to be supporting Obama, but it does not seem to be helping him that much so far.  The London coverage of Romney was ridiculously biased.  Romney also gave a great speech in Israel that the Palestinians naturally did not like, and the media for some reason seems to think that is important.  Meanwhile, he has moved on to Poland where he was warmly received.  Look for the media to find a way of insulting the poles as a way to attack Romney.