We waited to write this until after the election.  Regardless of your political persuasion, there are several things we can glean from the recent election results.

 The FED will inject another $600B into the economy via QE2 (Quantitative Easing – round 2).  This wasn’t necessarily in doubt, but was cemented by the results.

 The majority of the Bush era tax cuts will most likely be reinstated, for at least a twelve to twenty-four month period.   

 In a long-term sense, further corporate regulatory reforms out of Congress, which inevitably impact business earnings, will be slowed or possibly stopped.

 Sectors like healthcare (primarily pharmaceuticals and bio-tech) and financial services (banks) will likely benefit from the election results.  Alternative energy stocks will probably see a more negative bias. 

 As we know, markets are forward looking.  We experienced a 13% gain in the S&P 500 during the months of September and October.  This represents the largest two-month gain since the bottom of the market in March 2009.  So, the logical question is, “Where do we go from here?”

 We related in the summer that many of our internal indicators, like the advance/decline line were very strong.  We felt this internal strength would pull the markets higher, which it did.  At this point, they continue to lead the markets and this is encouraging.

 QE2 will likely serve as a short-term catalyst for the economy.  But, it’s a band-aid and the economy is in dire need of corporate and consumer confidence to return to some type of historical norm.  In our estimation, the economy is suffering from a confidence problem, not a money problem.    

 With that, on behalf of our entire Delta Team, please accept my very best wishes for a most Happy Thanksgiving.