With Barack Obama winning the presidential election, Democrats are set to control the White House, Senate and House at the same time.
Historically, one-party control has correlated with higher returns for the S&P 500 than gridlock, according to S&P strategist Sam Stovall, who looked back to World War II. In the end, though, some strategists suggest looking to fundamentals to divine where the stock market’s heading, rather than political correlations.
October surprise.
October may have been the toughest month for stocks since the 1987 crash, but the number of U.S. corporate credit defaults actually declined during the month, according to Standard & Poor’s.
Nevertheless, Diane Vazza, an S&P managing director, expects the faltering economy to continue to pound weak companies. She sees the 12-month default rate for speculative-grade issuers jumping to 7.6 percent by September 2009, from 2.9 percent now.
Female CEOs earn less.
No surprise: Female chief executives make less in total compensation than their male counterparts, according to a survey by the Corporate Library.
Women CEOs’ median compensation so far in 2008 is $1.75 million, 15 percent lower than the median compensation of $2.05 million for men. Big surprise: Women tend to have higher salaries.
Female CEO salaries are 3 percent above male CEO salaries, according to the survey. But salary is only part of a chief executive’s total pay. After adding cash bonuses, perks and stock compensation, men are more than making up the difference.
Paul Hodgson, a co-author of the report, says the difference could not be explained by the companies’ size, performance or industry. He suspects it may have to do with the fact that there are so few female CEOs. Less than 3 percent of the surveyed CEOs were female, a number Hodgson calls “shockingly low.” When sample sizes are small, it can lead to less-accurate results.
Bailing on Obama?
The New York Stock Exchange has been open during a U.S. presidential election only seven times in its history, and such days have traditionally been uneventful.
It first opened in 1984, when Ronald Reagan faced off against Walter Mondale. The exchange said then that it was staying open to reflect the international nature of the stock market. On that day, the S&P 500 rose 1.09 percent. Every Election Day since has featured a smaller one- day swing, with 2000 and 2004 showing barely any change. But on Tuesday, when Barack Obama surged past John McCain, the S&P 500 jumped 4.1 percent, its best Election Day result ever. In the next two days, though, the S&P 500 plunged 10 percent.
The Associated Press
