Obama's poll position may be helping stocks
President Obama’s popularity is slipping among some groups, according to recent polls, endangering his policy agenda and casting a pall over the midterm elections — at least as far as Democrats are concerned.
Meanwhile, the stock market enjoyed a robust late-summer rally and has recovered smartly from its recent slip, with the Standard & Poor’s 500 index closing Tuesday at 1,025.39, just 5 points or so shy of its 2009 high.
Coincidence? Maybe not.
The president’s loss of esteem among some white and older voters, as evidenced by a round of surveys reported by The Times this week, may be having a salutary effect on stock prices.
The surveys indicated that folks jumping off the president’s bandwagon are doing so for a variety of reasons, some of them non-economic.
But with the economy and the stock market no longer teetering on the edge of the abyss -- at least for now -- some voters may simply feel they no longer need the sort of sweeping change Obama promised.
“The power that Obama had when he took office was based on fear and great levels of anxiety, which always gives presidents a blank check to do what they may,” said Jim Paulsen, chief investment strategist for Wells Capital Management.
“But things are getting better in the economy and the markets. Obama needs that to happen for him to succeed, but the more it happens, the less political clout he has.”
Indeed, if Obama’s problems at the polls carve into the Democratic majorities in Congress next year, you may hear even more cheering on Wall Street. Since World War II, the stock market’s favorite political alignment has been a Democrat in the White House paired with a Republican Congress.
In other words, gridlock.
A sell-off in health insurance stocks Tuesday, before the president’s speech tonight on his healthcare reform effort, may be an indicator of that. The selling came as Sen. Max Baucus, a Montana Democrat, floated a new, less costly proposal aimed at attracting Republican support.
The plan drew immediate fire from the insurance industry, and the mere prospect that a compromise might be struck caused an index of health insurers to call in sick for the day. The index, which rose over the summer as the president’s reform measure stalled, fell 1.6% on a day that the S&P 500 rose almost 1%.
-- Martin Zimmerman
Photo credit: Associated Press