Politics and The Market's Not What You'd Always Expect

Ask anyone what the most notable event of the year has been so far, and most will tell you that it was the Scott Brown upset in the Massachusetts US Senate election for Ted Kennedy's seat.  Leading up to the election, there was a growing belief that a Brown victory would be positive for equities as it would restore some balance, or more cynically put gridlock, to the process.  However, looking at an intraday chart of the S&P 500 during the month of January shows that the Brown victory had absolutely no positive impact on the S&P 500.  In fact, after peaking on the day of the election when it became clear that Brown would pull off the upset, the S&P 500 has practically been in a straight line down ever since.  While there are other factors that have contributed to the recent fall (China, Greece, Technicals, etc.), investors didn't correctly judge the impact that Brown's victory would have on the market. 

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