Stocks in the US look to start Wednesday in a positive fashion thanks to a clear Republican party victory in the mid-term elections brushing aside disappointing service sector data from China and Europe and looking ahead to US service data and media company earnings from Time Warner Cable (NYSE:TWC), News Corp (NASDAQ:NWS) and CBS Corporation (NYSE:CBS) as well as electronic car company Tesla (NASDAQ:TSLA).
Republicans won both the House of Representatives and the Senate and now control the Congress. Congress is now a lot more likely to block Obama policy and changes to existing policy such as the affordable care act known as ‘Obamacare’ could cause some uncertainty especially with the healthcare sector.
On the positive side, bills won’t be so divided within congress so this could be positive for energy legislation maybe including gas and oil exports which could be beneficial for the energy sector.
Seasonally the six month period following mid-term elections tend to be the best-performing period for stock markets in the whole four-year presidential election cycle. Given the run-up the market has already had in the last two years since Obama was re-elected, especially the 10% rally in the last three weeks; there’s a distinct chance this time could be the exception.
With the big trend in media being the movement of advertising dollars online, it will be the traditional TV and print media companies that have done the most in digital media that could perform the best this quarter. Diversification is key which explains the strong performance of Walt Disney Company (NYSE:DIS) given the importance of its theme parks and consumer products to its revenue alongside its films and TV channels.
Twenty-First Century Fox (NASDAQ:FOX) kicked things off by beating estimates and looks set open just under 1% higher on Wednesday’s open.
Tesla (NASDAQ:TSLA), the electronic car company also reports.
Futures suggest the:
S&P 500 will open 5 points higher at 2,017 with the
Dow Jones expected to open 41 points higher at 17,424 and the
NASDAQ 14 points higher at 4,170.
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