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Bulls & Bears
This past week’s Bulls & Bears:
• Gary B. Smith, RealMoney.com columnist
• Pat Dorsey, Morningstar.com director of stock research
• Tobin Smith, ChangeWave Investing editor
• Scott Bleier, HybridInvestors.com president
• Charles Payne, Wall Street Strategies CEO
• Bob Beckel, Democratic strategist
Trading Pit: Indictment Rally
Is Wall Street trading on the White House?
The vice president's chief of staff, Lewis “Scooter” Libby indicted in the CIA leak case and immediately resigns.
But the president's right hand man, Karl Rove, not indicted, and it's unclear if he ever will be. The bulls on Wall Street took that news and ran with it. The Dow had its second best day of the entire year.
So is the worst over for the White House… and does that mean big things for the stock market?
Charles Payne: Absolutely. This is great news for the stock market, especially on the heels of Harriet Miers, when the Dow dropped triple digits. This has been the biggest week for Bush since his re-election. And don’t forget, the election started last year’s fourth quarter rally! We have a strong president and the country needs one because we have to push back the left. There’s a movement for oil companies to give back profits, pharmaceuticals to make drugs for free, and if Bush was weak, it would’ve happened.
Gary B. Smith: I don’t think this has any effect on stocks. In fact, stocks could’ve been up on the Miers news and down on the indictment decision. The market cares about things like hurricanes, oil, the new Fed chief, and inflation, but unless this blows up and becomes something bigger, it will have no impact.
Bob Beckel: This story is not over by a long shot. I think Libby will turn state’s evidence in three months. There are going to be more indictments. President Bush is facing a contrarian congress that wants to cut the budget and this hurts Republicans running in marginal seats.
Tobin Smith: We’ve just had great economic news. There was huge GDP growth last quarter. And don’t forget this was a quarter that had two of the largest hurricanes in the world. Earnings are up 13 percent this quarter which means stocks are undervalued.
Pat Dorsey: From day to day, the market may focus on anything. But in the long-term, it’s GDP growth and earnings. And that is what’s really driving stocks.
Scott Bleier: I usually think politics and stocks are totally disassociated. But last week, the political developments clearly buffeted the market and the two were totally intertwined.
We just spun our wheels and had some of the best and worst days of the year — all in the same week! I think stocks will start to head lower.
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