If voters don’t change their minds at the last moment, then we can very well expect that Barack Obama is going to be the next U.S. President. However, there are still doubts that there might be evidence of not “practicing what you preach”. The racial issue might prompt many to not vote for Obama at the last moment. Moreover, many Hillary Clinton supporters might actually abstain from voting. Obama’s loss will only confirm that racism is still a big issue in America. So no matter who becomes the President, it is certainly going to create history.

Now let’s see how the outcome of the election will affect stock markets. Will stock market be upbeat or crash if Obama wins? Popular beliefs are that stock markets prefer Republicans over Democrats. However, counter argument has been that stock markets have done well under Democratic Presidents. But things are not the same right now as it had been in the past. The economy is going through the worst financial crisis since the Great Depression. Stock markets might not react the same way as it has during previous elections.

Hypothetically, if Obama wins, then stock markets (because of the Presidential election) won’t be immensely affected on November 5. Stock markets react to shocks (surprises). The fact that all news channels predicting Obama will win has already been incorporated in investors’ decisions. So, Obama’s win won’t be a big surprise to stock markets anymore. After Nov 5, if he wins, stocks that will likely to do well are those related to alternative energy. On the other hand, in case John McCain wins, there might be slightly more reaction in stock markets. Stocks that will do well are likely oil companies and those related to nuclear energy.

The bottomline is that stock markets are not going to react very much due to the outcome of Presidential election. As it is true that this Presidential election is very different from previous ones, it is also true that the economy is very different from what it was in previous elections. Stock markets now reacts more to economic news rather than political.