by Rob Kirby, Kirby Analytics. October 2, 2006
While it’s still a little bit early for "tricks or treats" - anyone who watches TV or reads any amount of news has undoubtedly heard or seen the term "October Surprise" bandied about over the past few weeks.
As for me, I've heard the term enough that I decided to read up on the subject and share my findings with all of you on this first business day of October, 2006.
An October surprise is American political jargon describing a stunning news event with the potential to influence the outcome of an election, particularly one for the presidency. It is so called because Election Day in the U.S. is the Tuesday after the first Monday in November, and events shortly before the election have greater potential to swing votes. Most of the time, the term is used to label actions of a sitting president, especially with regard to military or foreign policy matters, but it can also apply to news stories unfavorable to the incumbent administration. "Historically, news outlets avoid investigative pieces critical of candidates within days of an election to avoid appearing partisan."
While news making events associated with "October Surprise" run the gamut from lurid to salacious to deadly seriousness - these news breakers always have the ability to alter political fortunes and thus move markets:
- 1 1968 Humphrey vs. Nixon
- 2 1976 Carter vs. Ford
- 3 1980 Carter vs. Reagan
- 4 1992 Bush vs. Clinton
- 5 2000 Gore vs. Bush
- 6 2003 California recall election
- 7 2004 Bush vs. Kerry
- 8 Rumors of a 2006 surprise
As to whether or not we get an October Surprise this month, late last month NewsMax.com ran an article by Ronald Kessler titled, Karl Rove Promises October Surprise;
"Rove is not saying what the October surprise will be. Asked if he would elaborate and give his thinking about the coming elections, Rove told NewsMax that his take largely parallels what RNC Chairman Ken Mehlman said in a Sept. 5 NewsMax story."
The fact that Rove isn't talking should come as no surprise to anyone. If we all knew in advance what Mr. Rove and his associates were actually planning - it wouldn't really be a surprise at all, would it?
While Rove isn't talking, others are. Blogging at the Huffington Post, Gary Hart for instance, has weighed in with his own speculation as to what this year's October Surprise might be.
I sure hope Gary Hart is wrong, but I'd suggest everyone buy plenty of gold and silver bullion just in case - we all might be pleasantly surprised what our gold and silver might be worth if he's right.
Overseas equity markets began the week favorably with Japan's Nikkei Index adding 126 to close at 16,254. North American markets didn't fare as well ending the day on a negative note with the DOW down 8.72 to 11,670.35, the NASDAQ off 20.80 to 2,237.60 and the S & P off 4.50 to 1,331.35. NYMEX crude oil futures finished the day off 1.88 at 60.95 per barrel.
Interest rates were 4 basis points lower across the curve with the benchmark government 2-year bond finishing at 4.66%, the 5-year at 4.59% and the 10-year finishing up at 4.61%.
On foreign exchange markets the U.S. Dollar Index dropped .40 to end the day at 85.28.
Precious metals ended the day mixed with COMEX gold futures giving up 1.10 to close at 599.10 per ounce while COMEX silver futures added .09 to end the day at 11.62 per ounce. The XAU Index was ahead .81 to 129.00 while the HUI Index gained 2.39 to 302.87.
On tap for tomorrow, September Auto sales data is due - expected 5.4M vs. prior 5.3M and also September Truck sales data is due - expected 7.2M vs. prior 7.1M.
Wishing you all a happy and enjoyable evening along with no unexpected, unpleasant surprises in your investment portfolios!
© 2006 Rob Kirby