Lady Jewel, market makers typically like Republicans and when they get elected markets typically reacte positively at first. Note, it's a very short term thing and over time markets do much better under Democrat presidents than Republicans. I'll elaborate on this a little more in another post though so as not to get too off track.

This time might be a little different though since the market recognizes the absolute necessity for a massive mainstream bailout and infrastructure spending as being the only way to avoid a prolonged recession or depression. If Obama gets elected the Dems will have complete control of congress and the presidency and will be able to whip up a huge plan and put it through in a short time.

If McCain gets elected, it will be much more difficult to get anything done. Dems will be bitter towards him and would probably kill off anything he'd put forth. A McCain plan would likely be more of a tax rebate nature and of a smaller scope.

What is better for the US in the long run is not for me to say but I speculate that the markets may react much more positively to a Democrat sweep than a McCain victory although the markets will probably be happy for change one way or the other and be happy that some kind of direction will return to the whitehouse after a crippling year with a lame duck president and a vicous, divisive, election.

One other factor, I think should be considered is that if the polls show Obama ahead going into Tuesday and McCain wins, I believe America will burn. I honestly believe that there will be rioting in every major city the likes of what we saw in L.A. after the Rodney King verdict. If the polls are that wrong there can only be one logical conclusion and there are going to be a lot of angry young black men and women out there who were expecting history to be made. Please understand that this is not a racist thing. People riot over much less, like when there sports team wins.

My Conclusion:

McCain Win = Possible initial rally unless rioting ensues on a large scale as I suspect, then possibly not so much of a rally :). McCain win will likely mean more subdued market going into Feb earnings, probably leading to soft markets and further declines over the winter. He would be a lame duck president from the get go and as such, market may respond negatively.

Obama Win = Probable initial rally followed by several large bounces as bailouts and infrastructure programs are announced. A hastened inflationary scenerio. Markets less likely to tank. I actually feel markets would hit an alltime high sometime within late 2009 with the down knocking down 20,000 in 2010. Bread will cost $6.00 a loaf and chicken eggs will be sold like Sturgeon eggs but so be it :)