Markets May See Post-Election Bounce

Wall Street is pinning its hopes on a moderate rally in U.S. stocks after this Tuesday’s presidential election. Trading volume should be light in the lead-up to the vote amid uncertainty about the outcome of the tightly contested presidential and congressional races. Ongoing worries about corporate earnings mean cautious fund managers and investors do not anticipate a reprise of the fourth quarter of 1999 when technology stocks soared to unprecedented highs. “The one uncertainty is the presidential election, which is simply too close to call, and I think no one is going to venture aggressively before that,” Larry Wachtel at Prudential Securities said. “But once that’s out of the way, then I think we have the genesis of a year-end rally.” Fund managers predict moderate sector rallies Wednesday, depending on who wins the White House. Fund managers say the election result will not have a dramatic effect on the markets. “This election is about a change at the margin,” said Nick Sargen, J.P. Morgan’s global market strategist for private clients. “Investors don’t really see such a huge difference in the policies, and, therefore, there is not much market reaction.”