This Day On The Street
Continue to site
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

Did the Fiscal Cliff Really Charge the Market?

House Speaker John Boehner (R., Ohio) also made remarks that specifically called out Democrats and said they had to "get serious" about the spending problem. Though Obama and Boehner reiterated on Wednesday their beliefs that both sides could come to an agreement, the challenge by the speaker for Democrats to offer serious spending cuts is a vital roadblock to solving the whole cliff.

Central to this discussion is what Democrats are willing to cut, and what changes in tax-related issues that Republicans are willing to submit. Officials familiar with White House strategy are aware that certain Democrats have shown unwillingness to accept significant entitlement spending cuts, according to Politico.

Frank Fantozzi, chief executive of Planned Financial Services, said that he thinks Republicans will eventually be willing to consider increases in tax rates -- dividends, capital gains, upper marginal income rates -- but that these will be offset by concessions to Democrats on caps in deductions.

"I'd be surprised that we get something resolved by the end of the year; we've been telling our clients 'don't plan on it,'" said Fantozzi. "So I think the compromise is going to come in the first quarter ... what the president will probably do with the help of the Senate and everything else is make some short-term adjustments."

It also may be important to note that economic indicators this week have hinted at a strengthening U.S. economy.

"What's more, each slightly better-than-expected economic report that is ignored by investors who are focused almost exclusively on the cliff, may serve as an additional turn of the winch that may ultimately catapult equity prices progressively higher once investors feel confident that an improving economy won't be derailed," Sam Stovall, chief equity strategist at S&P Capital IQ, wrote in a note late Wednesday evening.

While the president's remarks may have been one factor that contributed to an uptick in equities on Wednesday, there was enough cynicism from Boehner that could have reasonably knocked back the surge. (Some market headlines credited Senate Majority Leader Harry Reid's (D., Nev.) pessimistic remarks on Tuesday with slugging the major indices in late afternoon trades.)
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $109.50 -1.16%
FB $92.47 0.08%
GOOG $639.16 -0.50%
TSLA $226.72 -2.26%
YHOO $32.37 1.57%


Chart of I:DJI
DOW 17,050.75 +138.46 0.82%
S&P 500 1,995.83 +15.91 0.80%
NASDAQ 4,810.7880 +19.6360 0.41%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs