Keystone's Morning Wake-Up 11/7/12; President Obama Wins Re-Election; The First Media-Selected President in America's History

President Obama wins reelection. His "Four More Years" tweet on Twitter circles the globe. The republicans are crying four more tears, two from each eye. Obama took the battleground States with great help from the automobile bailouts. The U.S. remains polarized and split. The country is set up no differently than it was yesterday. Democrats control the Presidency and Senate while republicans control the House. Most interestingly, this is the first president elected with significant help by the media which promoted President Obama for re-election the last few months. The political analysts will have lots to write and talk about concerning the new role that media now plays in choosing each president. The media, via the subtle daily liberal slant, told the general population to endorse the president's re-election and jump on board the train, and the masses followed that instruction yesterday. Media is a powerful force. The polls and Intrade were proven correct predicting an Obama victory, in fact Intrade was more correct than any of the media polls, firmly placing Obama strongly in the lead the last few months. Romney receives 48% of the popular vote and 56 million people voted for a change. The country remains split down the middle.

The East Coast of the U.S., and West Coast, the urban and city areas, all went to Obama, while rural America, and the center and south went for Romney. Thus, a clear split between rural America versus urban America exists. The class warfare theme is also in play moving forward.  The north central States such as Michigan, Wisconsin and Ohio were delivered to Obama due to the easy government bailout policy for GM, Government Motors. Folks are simply voting for the one who butters their bread. If you remove the results from a dozen of the major American cities, the balance of the country is republican. So, the takeaway is, more of the same moving forward, only perhaps worse.

The dollar drops overnight since Chairman Bernanke will keep his job.  The election clears the uncertainty over the election but there is no clear mandate. The folks that do not like Obama's policies will continue to dislike his policies, and those that like the Keynesian approach will continue to support Obama. A weaker dollar sends the euro higher. The euro is 1.2847, the dollar/yen is weaker and Japan equities were weak overnight.  The weaker dollar bounces copper, commodities, gold, silver, and equities. The 10-year yield is lagging, however, and not moving higher as would be expected. Dollar down = euro up = dollar/yen down = copper up = gold up = commodities up = equities up = 10-year price down yield up.  Oil is weak moving counter to this asset relationship.

The risk of hitting the financial cliff is now greater. The president may simply let the cliff occur so taxes on the wealthy increase.  The Israel-U.S. relationship will come front and center again, and the Israel-Iran conflict will increase in intensity moving forward.  The Bengazi mess on 9-11 will likely become a thorn in the president's side. Republican's will probably make hay with this scandal moving forward and dog the presidents move forward.  Governor Christie's (NJ) hopes for a future run for the presidency are likely over. He is a republican governor that was on the short list of Romney's vice president picks.  In the final days of the campaign, the images of Christie strolling hand and hand with President Obama, along the beach, seriously damaged Romney's aspirations. Romney's late push higher was stifled by Hurricane Sandy where he disappeared from the news for several crucial days while President Obama appeared in charge of the relief efforts, with bipartisanship, strolling along with Christie. The republicans will be blaming Christie for years to come. The election also shows how the general population remain annoyed at the large banks that created the mess in the U.S. and the labeling of Romney as a big business, uncaring fellow, stuck.  The irony is that the too-big-too-fail banks will get bigger and the regional banks that built America, will likely continue to close and become gobbled up by the large hedge fund banks, the opposite path that most Obama supporters realize.

The major market influences currently are UTIL 466.36 (now bearish), SOX 378.60 (now bullish), RTH 44.45 (now bullish) and VIX 16.00 (now bearish). Any change to any of these parameters will push the broad indexes in that respective direction. For the SPX starting at 1428, the bulls need to touch 1433.50 to create an upside acceleration thru the 1429-1435 resistance gauntlet discussed yesterday. The bears need to push under 1417 to accelerate the downside. A move thru 1418-1432 is sideways action. The 10-year yield is now 1.69%. Investors do not appear willing to pull money out of notes and bonds and place it in the stock market. The futures show the Dow up 10, S&P's up 2 and Nasdaq up 5. Whoopsies. As this missive was typed, the Dow has now slipped negative. The 10-year yield is now 1.68%, actually moving lower.

Note Added 11/7/12 at 6:01 AM:  Futures show the S&P's up 2, Dow up 5 and Nasdaq up 5. The euro is at 1.2832. The Nasdaq is up 0.20% while the S&P's are up 0.15% so tech is leading the broad markets on the up side, this is encouraging for the bulls today.

Note Added 11/7/12 at 7:02 AM:  Futures are S&P's -2, Dow -25 and Nasdaq -3.  Tech is now leading the broad markets lower which favors the bears today.

Note Added 11/7/12 at 7:31 AM:  The euro collapses under 1.28 now printing 1.2757.  The futures are S&P's -9, Dow -89 and Nasdaq -18. This is the futures levels from last evening when the markets knew Romney would lose at about 11 PM EST.  The Nasdaq is -0.67% and the S&P's are -0.62% so tech continues to lead the broad markets lower which is bear-friendly. Draghi says the Eurozone remains weak and a slowdown has now reached Germany.  Perhaps Draghi is laying the ground work for the rate decision tomorrow morning where the euro needs to be weaker to promote manufacturing and export growth in Europe moving forward.

Note Added 11/7/12 at 8:30 AM:  S&P's -12, Dow -115, Nasdaq -25. Hang on Nellie.