(As of 7:20 am pacific)
It’s in the books. Obama has won a second term. Senate and House control have remained the
same. The status quo prevails today. Investors and hedge fund managers have
reacted with disappointment this morning, giving back yesterday’s gains. Gold is up and oil is down, while the dollar
rides higher against all other currencies.
Speaker of the House Boehner has thrown down the gauntlet again spouting
‘no new taxes’. The ‘fiscal cliff’ is
getting uncomfortably close and it’s not likely that a lame duck Congress will
react with much vigor to change things.
Europe news is slanted to the negative this morning as well. But I
believe that this morning’s market drop of triple digits is more related to the
election than the fiscal cliff or European activity. There are still several weeks for the market
to absorb and react to the fiscal cliff, and today’s negative reaction to
another 4 years for Obama will likely fade as the day wears on and investors replace
disappointment with the optimism that comes when we say that it may not be as
bad as we think. There may be trouble
ahead but it is not yet firmly in our headlights as we focus on peripheral
events.
