Hedge fund manager Mario Gabelli says the president's No. 1 job is to get himself re-elected.

"To do that he has to make voters feel the country is moving in a more positive direction," Gabelli tells Barron's. "Instead, voters are worried about the deficit, American competitiveness and gasoline prices."

“(Federal Reserve Chairman Ben) Bernanke is near the end of QE2,” says Gabelli. “The question is what happens next.”

President Barack Obama (Getty Images photo)

President Barack Obama "has to start making the U.S. competitive by realizing we can't over-regulate.”

Though Gabelli says that at this point a 10 percent decline in stocks can't be ruled out, the market's multiple could rise if interest rates stay where they are. “Other than a near-term correction, there isn't much reason the market can't be up 5-to-10 percent for the year,” he says.

Another element that affects the market psychology is deals, Gabelli observes. “When I see the Japanese buying companies, it says they perceive the yen as fully valued. It gives them a competitive advantage in doing deals,” he says.

“The Canadians see the same with regard to their currency. The Swiss are looking to buy American companies because the Swiss currency is so strong and they want to grow.”

“All this activity will be positive but stock-specific.”

Dailyfx.com reports that the Swiss franc is near a record high, but that Swiss Industrial Production is expected to drop for the first time in a year, down 7.9 percent in the three months through March.