[jyl]

Island, I don't agree with your diagnosis of the market action.

Here's my take. I'm not the Oracle of the stock market (no-one is), but I do have to watch it pretty closely.

The stock market fears uncertainty, and a hotly fought election campaign that could have ended up in court creates uncertainty. The market was likely to move up post-election regardless of who won as long as the decision was quick and clean (i.e. removed uncertainty). That is my personal opinion, and the tactical pieces I read from the Street were also citing a contested outcome as the primary risk. So the current post-election bounce isn't a surprise.

The market probably did bounce more because it was a Bush victory, because the policies of a Republican administration are seen as more friendly to rising corporate profits.

You can see this in some sectors perceived as politically sensitive. For example:
- Defense contractors had a nice bounce on 11/3 (GD, LMT, BA, CAI, etc). The reasons are pretty obvious - the Bush Administration has been a great time to be a defense contractor.
- Pharmaceuticals also had a nice bounce on 11/3 (PFE, JNJ, etc). Investors perceive the Bush Administration as less likely to pressure drugmakers to lower prices or to permit importation of drugs from other countries.
- Indian outsourcers had a really nice bounce on 11/3 (CTSH, INFY, WIT, etc). Investors feared a Kerry Administration would try to restrict the outsourcing of jobs to India; they aren't worried about the Bush Administration doing so.
- Oil companies (majors and oilfield services) had a nice bounce on 11/3 and have countinued to move higher. Again, the reason is pretty obvious - a Bush Administration is perceived as friendly to the oil industry, who have enjoyed record profits in recent years.

I don't think investors (professional ones, anyway) are particularly influenced by the extremes of the media, on either the right or left side. They're not getting their news principally from Dan Rather or from Fox News, but instead from CNBC, Bloomberg, WSJ, Reuters, AP, and so on. On economic events (jobs, GDP, etc), they're getting their news direct from the data release, not filtered through a newscaster. And they tend to sift through the news pretty carefully and skeptically.