This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Did the Fiscal Cliff Really Charge the Market?

Stocks in this article: ^DJI ^GSPC ^IXIC

NEW YORK ( TheStreet) -- What if it wasn't the fiscal cliff that made the market jump?

As negotiations over the so-called fiscal cliff have saturated news sites for most of the week, it appeared natural for market headlines to suggest that President Barack Obama's remarks Wednesday afternoon fueled the uptick in major U.S. equity markets.

Obama appeared minutes after 12 p.m. EST when the Dow Jones Industrial Average was ticking slightly lower, but reached session highs just minutes after he concluded his remarks. And the market held those gains until the close at 4 p.m.

But with very few details emerging from closed-door talks, and no signal that legislators and the president are even close to solving the fiscal cliff -- when tax relief measures and deep spending cuts will automatically go into effect at the beginning of 2013 -- investors may want to reconsider how much these early comments are truly having on the markets.

"We humans suffer from narrative fallacies, I think is the term, is that we think things have to happen for a reason and sometimes it's just a case of there's more buyers than sellers," said Marty Leclerc, chief investment officer at Barrack Yard Advisors.

Leclerc said that he believes elected officials will eventually do something to solve the nation's fiscal troubles, and he said complacency among investors remains very high. In other words, eurozone woes, a China slowdown, and the U.S. fiscal cliff all are events very well known to the financial markets.

The president expressed confidence that both parties would agree on a framework in the coming weeks.

"In fact, my hope is to get this done before Christmas," Obama said Wednesday.

Though this would bring some optimism to some investors, it's difficult to infer more specifics from the president's remarks.

A framework doesn't necessarily imply how much in spending cuts or what tax increases would be made. Nor does it specify if Obama's hope to get things done before Christmas means a decisive fiscal year 2013 budget or if it would be a temporary band-aid to kick the deal into the first quarter of next year.

1 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

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.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs