- Analytical Commentary -

January 20, 2010 (FinancialWire) (By Dr. Joe Duarte) — Shares of Apple (NASDAQ: AAPL) got a nice jump on rumors of an upcoming tablet computer by the technology icon, but Wall Street got off to a rallying start on January 19, as traders bet on the return of gridlock in the U.S. government.

Wall Street sees gridlock as a good thing. And they have a point, given the fact that divided government usually leads to only the passage of laws that deal with things that are absolutely necessary. As with the past two presidencies, it’s clear that when Congress and the President are from the same party, things get done, and lots of people don’t seem to like the things that get done, or nearly done.

From an investor’s standpoint, though, gridlock means that the government is too busy fighting within itself to mind the store outside of Washington. And while that can be good, it can eventually lead to its own set of excesses, as with the subprime mess and other past bubbles.

There are several questions to ponder here, though. If indeed gridlock does return, will it be a good thing or otherwise? And if its good, then who or what will benefit? One asset that seems to be getting lots of benefit is the U.S. dollar, as gridlock may lead to decreased government spending and perhaps some deficit cutting. It happened during the Clinton years and traders are hoping it could happen again.

The problem is that this isn’t 1994 and that Republicans like to spend as much as Democrats. But maybe that’s the key. If they’re all fighting amongst themselves and with each other, those of us who actually work for a living may get a break. Even if it’s a few months, it may be worthwhile.

Wednesday should be a very interesting day on Wall Street.

[Go to http://www.financialwire.net/?s=joe+duarte to see more commentaries by Dr. Joe Duarte.]

The FirstAlert(tm) Economics Calendar lists Housing Starts & Building Permits for December (8:30 a.m.), Producer Price Index (PPI) for December (8:30 a.m.), EIA Petroleum Inventories (10:30 a.m.).

The FirstAlert(tm) Events Calendar showcases BTE, KOG, EXXI, GTE at IPAA Oil & Gas Investment Symposium Florida; EXR at UBS Self Storage Real Estate Summit; PRXI Analyst Meeting; SPW Annual Investor Meeting.

FirstAlert(tm) Website of the Day: http://www.thebeatles.com

Quote of the Day: “I’m disappointed in acting as a craft. I want everything to go back to Orson Welles and fake noses and changing your voice. It’s become so much about personality.” Skeet Ulrich

Today is: Camcorder Day.

Today in History: John Marshall was appointed Chief Justice of the United States in 1801. L.A. Thompson patented the roller coaster in 1885. The United States Senate allowed the Navy to lease Pearl Harbor as a naval base in 1887. The coldest temperature in California was recorded by Boca station at -45° Fahrenheit in 1937. Elvis Presley received his draft notice in 1958. Meet the Beatles, the first Beatles album in the United States, was released in 1964. The first pulsar was discovered in 1969 in the Crab Nebula.

Happy Birthday: George Burns, DeForest Kelley, Slim Whitman, Arte Johnson, Buzz Aldrin, Paul Stanley, Bill Maher, Lorenzo Lamas, John Michael Montgomery, Skeet Ulrich.

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