Both Spain and France unveiled their new budgets today, and Spain disclosed the results of a new round of independent bank stress tests as the cherry on the cake. But -- as is common in this type of exercise -- some of the figures just don't add up. For example, the French budget assumes 0.8% GDP growth next year, which is above private forecasts. In the same week that Spaniards protested against austerity and clashed with police, the new Spanish budget calls for more of the same. The French CAC-40 index was off 2.5% today, while the Spanish Ibex 35 fell 1.7%.
U.S. stocks also fell, but they didn't fare as badly, with the Dow Jones Industrial Average
According to the Stock Trader's Almanac, stocks have advanced in every fourth quarter since World War II, excluding 1948, when an incumbent president wins the election. So, assuming Barack Obama takes the election -- as seems increasingly likely based on polls and prediction markets--is that a good sign for U.S. stocks next quarter? I think investors might be better served following events in European politics instead, for, as The Economist warned in its Thursday print edition, "unless the Spanish prime minister and his counterparts around Europe act, the single currency itself will once again soon be at risk."The other alternative is to focus on individual stocks; happily, The Motley Fool has analyzed the economic programs of both presidential candidates and found Stocks That Could Skyrocket After the 2012 Presidential Election.