Kemp Choice Good News For Financial Markets?

Bob Dole’s choice of Jack Kemp as his running mate could be good news for U.S. financial markets, especially if it helps Dole narrow the gap in the polls with President Bill Clinton, said John Hennessey, chairman and chief executive of CS First Boston.

“There was a certain skepticism that Dole, without a pretty strong second guy, was not a viable candidate,” Hennessey said at the Republican National Convention, which got under way Mondaywith a vote on the party platform. “I think that went up in smoke on Saturday when he chose Kemp.”

Republicans want to showcase Dole and his economic plan of income tax and capital gains tax cuts, a $500 per child tax credit, and expansion of tax-sheltered savings accounts.

“It will be pretty interesting to see the markets in the next couple of weeks,” Hennessey said. “People are going to start looking at (Dole’s economic program) more seriously because there’s a pretty good chance he’s going to win and a pretty good chance he’s going to enact the program.”

U.S. financial markets yawned when Dole unveiled his economic program last week, in part because his plans to boost economic growth by cutting income taxes didn’t include specific budget cuts to keep the federal deficit from ballooning.

“The markets are much more in control now than the politicians,” said Hennessey, who is attending the convention as a Republican party member.