President-elect Barack Obama hasn't even moved into the White House yet. But Wall Street is already showering him with praise for injecting confidence into the battered psyche of investors and working quickly to hatch a plan meant to jolt the economy out of its worst funk in decades.
A market that two weeks ago was desperate for political leadership and a clear strategy to repair the economy appears to have found it in Obama, who is fast emerging as a decisive economic commander in chief.
Stocks soared last week after Obama moved aggressively to fill the power vacuum until he's sworn in and demonstrated his commitment to dig the USA out of its economic rut.
The Dow has rallied 17% during its current five-session win streak — its best five-session run since 1932. The rallies coincided with Obama-related news and public appearances where he introduced his economic dream team and sent a clear message that he'll do whatever it takes to repair the economy.
Jack Ablin, chief investment officer at Harris Private Bank, says the so-called Obama Factor has been "a solid force behind the recent moves in the stock market."
Adds Pat Adams, a hedge fund manager at Choice funds, "The market is thinking that Obama will put a fix to (the economy)."
Analysts note that the $800 billion in new lending programs rolled out by the government last week to ease consumer credit bottlenecks and lower mortgage rates also spurred stocks.
So what has Obama done to restore hope to investors?
•He's made the economy priority No. 1. Obama has said, "Help is on the way." Wall Street believes him. "He's willing to spend whatever it takes to solve the problem," Adams says.
•He's chosen a first-rate economic team. Obama is surrounding himself with experienced and well-respected economists and bankers to help find innovative ways to restore economic vitality. Wall Street has applauded his pick for Treasury secretary, Timothy Geithner, now head of the New York Federal Reserve. Naming former Treasury secretary Larry Summers to head his National Economic Council and ex-Fed chief Paul Volcker to head a panel created to spur job growth and boost business adds to his credibility.
•He's moved quickly to fix things. Obama says he will have an economic plan ready the day he takes power. "The key is he said they wouldn't be crafting policy when he takes office but signing (it) into law," says Robert Barbera, chief economist at ITG.