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Stocks Soar Ahead of Presidential Election

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Today's financial recap and tomorrow's financial outlook.

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MINYANVILLE ORIGINAL On the day of the presidential election, early trading started off as a flat day on the back of disappointing economic data from Europe. On a monthly basis, German factory orders fell 3.3%, the biggest drop in the past year. Last month's orders fell a revised -0.8% and economist estimates saw a decline of -0.4%.

Overnight, the Reserve Bank of Australia chose to keep its benchmark interest rate unchanged at 3.25%. Economists were widely expecting a cut of 25 basis points to 3%. The Aussie dollar rose to 1.0437 vs. the US dollar from 1.0370 shortly before the announcement. The central bank's reasoning behind declining to cut the interest rate was the noted pickup in housing market activity and the benefits of eased conditions. It also noted that recent Chinese data had suggested that its economic growth had stabilized and potentially bottomed.

Intraday, stocks jumped and broke through technical levels near S&P 1423. Commodities were close behind, with crude oil and precious metals spiking shortly thereafter. Crude oil futures reached an intraday level as high as 4.15% before closing up about 3.1%. Gold futures finished the day 2% higher. Some investors suggested that the cause of this jump was the expectation of an Obama win, but it is more likely that a series of technical levels were broke, causing stops on short positions to be triggered.

In the morning, Fossil (NASDAQ:FOSL) beat on the past quarter's earnings, but missed revenues by a very wide margin. Future guidance was also slightly lower, but the stock plunged, closing 10.5% lower on the day. Post-market, News Corp (NYSE:NWSA) beat earnings and saw large gains in its cable divisions.

Tomorrow's Financial Outlook

Tonight's result of the presidential election will undoubtedly have an effect on market action tomorrow. The generally accepted principle is that an Obama win is stock market negative and that a Romney win is stock market positive. However, this kind of reaction cannot be painted with such a wide brush, and is more specific to individual sectors such as financials (regulation) and health care.

In the afternoon, the US Treasury will auction $24 billion in 10-year notes. This amount is slightly larger than the normal $21 billion. In economic data, the Federal Reserve will release last month's consumer credit data. Economists estimate that total consumer credit will rise by a seasonally adjusted $10.175 billion.

In earnings, Time Warner (TWX), Starwood Properties (HOT), Kraft Foods (KRFT), Qualcomm (QCOM), Activision Blizzard (ATVI), Whole Foods (WFM), Continental Resources (CLR), Prudential (PRU), MAKO Surgical (MAKO), Monster Beverage (MNST), CBS (CBS), and Macy's (M) will report.

Twitter: @Minyanville

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No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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