S&P Falls After Obama Reelected; Fiscal Cliff, Eurozone Growth Risks Remain ($SPY $SPX)

The S&P 500 sold off after President Obama was reelected. Now the main issue on everyone's mind is the U.S. fiscal cliff, which would raise taxes, cut government spending, and potentially kill economic growth if there is no deal between democrats and republicans to lighten the blow.

Today, the S&P 500 ($SPX) closed at 1394.53, down 2.37%, and broke through the uptrend line from October 2011. So there are officially cracks in the foundation. S&P 500 is now on its way to test the 200 day moving average, so see how it reacts there. Look how the S&P reacted at the 200dma since the previous debt crisis and downgrade in 2011.

source: stockcharts.com

Articles to read:

Best Rally in Decade May Slow as Obama Faces Congress on Tax - Bloomberg News/SF Gate

Nov. 7 (Bloomberg) -- Stock and bond investors enjoying the biggest advance in more than a decade under Barack Obama may see the momentum fade as the rallies age and the president confronts Congress over spending cuts and taxes.

Boehner opens door to ‘new revenue,’ to halt debt - Washington Post

Republicans are “willing to accept new revenue” to tame the soaring national debt and avert an ugly battle over the approaching “fiscal cliff,” House Speaker John A. Boehner said Wednesday in a speech that offered a potential path to compromise in year-end budget negotiations.

Fitch Ratings warns of U.S. credit downgrade from fiscal cliff - LA Times

Fitch Ratings said that there would be "no fiscal honeymoon" for President Obama, warning early Wednesday that the U.S. probably would lose its AAA credit rating if the White House and Congress don't address looming tax increases, spending cuts and the fast-approaching debt ceiling.

Moody's reserves judgment on U.S. rating until after budget - Reuters

Moody's Investors Service said on Wednesday it will hold off on its judgment of whether to cut its sovereign credit rating for the United States until after the 2013 budget process is completed.

German industry sputters as euro zone crisis weighs - Reuters

German manufacturing, the locomotive of Europe's largest economy, is running out of steam three years into the euro zone debt crisis, which has clobbered orders and output.

Eurozone core economies under pressure - Sober Look

Markit: - The downturn in German construction gathered pace in October, with the civil engineering subsector showing particular weakness over the month.

Chaos in Athens: Greek police use water cannons, teargas against protesters - RT (and see RT's livestream of protests near Syntagma Square)

The clashes come ahead of a Parliament vote on further austerity needed for another EU bailout. Opposition raised questions in Parliament earlier on Wednesday, forcing a voting delay.

Boeing announces defense division restructuring - Reuters

(Reuters) - Boeing Co announced a major restructuring of its defense division on Wednesday that will cut 30 percent of management jobs from 2010 levels, close facilities in California and consolidate several business units to cut costs.

Obama win leaves budget uncertainty for US arms makers - Reuters

* Additional budget cuts seen delayed until March
* Election maintained status quo
* Compromise may still involve further defense spending cuts

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