Wednesday’s market movement should be significantly driven by the Iowa Caucus results, and given Mitt Romney’s lead in New Hampshire, the stock market has solid support from politics over the near-term.
If the tally in Iowa were to show an electable, presidential and most importantly, a Wall Street favorite as Iowa’s winner, the market should rally. Thus, the shortfall of Ron Paul, not a likely Wall Street favorite given his views on the Federal Reserve, should find approval from the market. Furthermore, the strong performance of Mitt Romney should start stocks higher on Wednesday. That’s if investors understand the fact that Romney’s position on how to handle “Obamacare” is the one that is most likely to supplant it, given possible Supreme Court cohesion.
Rick Santorum has a chance to perform decently through the national primary process and his speech Tuesday night was moving, but it appears Romney has a better chance in the general election. Look for stocks to support the GOP direction, if the Street gets Romney’s wise health care strategy.
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