The Obama rally that wasn't

Here's why you shouldn't try to use political events to explain random walks on Wall Street.

Exhibit A, James Surowiecki last night:

One interesting variable to consider in thinking about how the stock market might react tomorrow to tonight's election results is the possible reaction of foreign stock markets, which as we know have lately often had a powerful influence on how the U.S. market opens. At the moment, the Australian and Japanese markets are up sharply, presumably as a result of today's U.S. rally. But one could easily imagine that rally being extended—and, even more important, one could easily imagine European markets rising sharply—if Obama were to win, since it seems clear that he's the preferred candidate of most of the world. And that, in turn, could help the U.S. rally keep going. In fact, I think it's possible that an Obama election could have a longer-term impact in boosting global markets' confidence in the U.S., even if it's also possible that American investors would be happier with McCain. So it’ll be worth paying attention to what Asia and Europe do tonight once we have a clear sense of the winner will be.

Exhibit B, major world stock indices as of 12:08 p.m. ET: