The Associated Press
Upper-income Americans may face a tax increase. Auto fuel economy standards might be raised. Stocks of construction and engineering companies could benefit.
America's decision to re-elect President Barack Obama over Mitt Romney will affect all that and other elements of the U.S. economy and financial system â¿¿ from the health care law to the overhaul of financial rules.
At the same time, a gridlocked Congress will limit Obama's influence. Tuesday's election kept Republicans in control of the House. Democrats still control the Senate, but without a commanding majority.Here's how Obama's re-election could affect key sectors: â¿¿ ECONOMY: Obama has laid out some key themes for rejuvenating the economy: Extend Bush-era tax cuts for low- and middle-income Americans. Spend more to build and repair roads, bridges and other public structures. Provide targeted tax breaks to businesses. Most immediately, Obama needs to persuade congressional Republicans and Democrats to reach a budget agreement to prevent the economy from falling off a "fiscal cliff." Without a deal, deep spending cuts and tax increases will start to kick in next year. The combination of those measures could send the economy back into recession and drive the unemployment rate back up to 9 percent next year, according to estimates by the Congressional Budget Office. The rate is now 7.9 percent. Analysts warn that Congress must break its stalemate for the economy to sustain its recovery. "There will be a lot of brinksmanship, and that will hurt the economy and likely upset the financial markets," Mark Zandi, chief economist at Moody's Analytics, said Wednesday. Still, the urgency of the crisis could "generate the political will necessary to get the deal done," Zandi said. And that could mean "much, much stronger growth" by 2014. Others caution that even if the fiscal cliff is averted, the economy may continue to be hampered by slow growth, stagnant pay and modest job gains.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV