Don't Get Carried Away With Fiscal Cliff Optimism
The market's jump on Monday may seem a bit overdone when one considers that all the rhetorical optimism has yet to be backed up by meaningful negotiations. But market analysts have suggested the swooning sentiment could be warranted.
"I think that it's probably a bit of a knee-jerk reaction after a sustained period of bad news regarding the conversations," said Gayle.
"I think the positive reaction in the market is warranted to some extent in that a lot of its selling was, first of all, surprise selling on the part of those individuals -- could be close to half the population, could be close to half the investing population -- who actually thought as late as 10 p.m. election night that [Mitt] Romney was going to win," said Gendreau.
Gendreau also noted that there likely had been a lot of selling based on tax-related issues, such as the possible increase of capital gains taxes and others that would rise automatically in the event of a full or partial fiscal cliff.So while the market has given investors some excitement for Monday, ongoing negotiations in Washington D.C. are likely to offer some rocky trading sessions as politicians jockey for the gritty details of a budget resolution. In other words, expect politics as usual on the horizon. -- Written by Joe Deaux in New York. >Contact by Email. Follow @JoeDeaux
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