Markets rarely move on State of the Union speech
Regardless of what President Obama says in Tuesday night's State of the Union address, don't expect markets to react much one way or the other tomorrow. Historically, stocks barely budge in the trading session following the annual presidential presentation, notes Jeffrey Kleintop, chief market strategist at LPL Financial.
"Most State of the Union speeches see less than a 1 percent move in the stock market on the following day and the average move is only 0.14 percent," Kleintop says in a new note to clients.
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The S&P 500 hasn't moved as much as 2 percent in the trading session following a State of the Union address in more than a decade, when it plunged following President Clinton's final speech. See the chart, courtesy of LPL Financial, below:
What investors can expect is for the president to highlight the immediate need for Congress to come together to extend the payroll tax cut and unemployment insurance benefits through 2012, Kleintop says.
Additionally, the president will also likely call for increased infrastructure investment, including school construction, roads and bridges, and high-speed rails, says Kleintop. However, Congress is unlikely to open the purse strings to fund such programs, the strategist notes.