President Barack Obama has a slight lead over presumptive Republican candidate Mitt Romney in a handful of major polls but the next three weeks will decide the fate of the 2012 election, according to Jim Bianco, president of Bianco Research.
Why? The next 21 days includes major economic, political and market moving events that have the power to sway voters and the election, including:
Aug. 27-30: The Republican National Convention starts in Tampa, FL.
Aug. 31: Bernanke gives his annual speech in Jackson Hole, WY. "The Fed always tells us nothing of substance will be in the speech. [But] Last year Bernanke laid out Operation Twist and two years ago he laid out QE2. So, we'll see," Bianco writes in an email to The Daily Ticker.
Sept. 4-6: The Democratic National Convention starts in Charlotte, NC.
Sept. 5: The European Central Bank governing council meets. It is expected that eCB President Mario Draghi will outline his plans to do whatever it takes to save the Eurozone.
Sept. 7: The monthly jobs report for August is released. The current rate of unemployment stands at 8.2 percent.
Sept. 12: A German court rules on the constitutionality of the EU's bailout fund. The outcome of this ruling is "critical for the outlook for Europe," says Bianco.
Sept. 12-13: The Federal Reserve holds its next FOMC meeting. "The meeting is shaping up as the make-or-break moment for QE3," says Bianco. "At this meeting the FOMC members update their forecasts and Bernanke holds a press conference. These events lend themselves well to policy changes (adding QE3), which is another reason many expect action at this meeting. Additionally, the next meeting is not until late October and that is perceived to be too close to the election."
Bianco joins The Daily Ticker's Aaron Task in the accompanying video. Bianco is forecasting that the Fed will continue its bond buying program (more commonly referred to as QE) on Sept. 13. However, if the Fed does not act, "we might be entering the 'sell the news' type of period as opposed to 'buy the rumor' which we've done for the balance of the summer," says Bianco, noting that any major sell-off could have negative implications for Obama's reelection bid.
While the markets currently are tipped in Obama's favor, "once we get a week or so past the conventions, we will have a pretty good idea who is in the lead," Bianco says. "The markets might have [the election] all decided by the end of September."
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