Obama has opened the door to a Twitter storm, encouraging citizens to use the #my2k hashtag to voice concerns about the fiscal cliff. Talks at the Capitol are now underway. While nothing’s been set in stone, the markets are finally rebounding from the burden of uncertainty that’s plagued the US in the last few months. Those in the equity markets are arguably less exposed to negotiations and possibilities of a second recession.
The metrics seem to check out. Stock futures popped today with crude oil jumping over 150 basis points. All the major indices (Dow, Nasdaq, S&P 500) are moving higher today with the Dow breaching 13,000 during the day and Nasdaq breaking 3,000. Despite the positive trend today, obvious risks and indecision remain.
Traders focused on the bond markets are still seeing high levels of risk in growing spreads for corporate bonds. Estimates for GDP growth are inching towards the 3% mark but economic growth hasn’t been as strong as some have projected.
Ominous MY2K countdown clocks have been all over the web. Our deficit days have been clearly numbered. Proponents on both sides have been fighting for the steering wheel as the U.S. gets closer to the cliff and nowhere near resolve. With this new MY2K campaign, it seems the cliff has become more of a PR issue in getting an open dialogue and placate worried investors.
Famed value investor, Warren Buffett has not made significant changes to his long-term investments. He has been vocal about higher taxes on top earners along with other financial titans.. Jamie Dimon, chief executive of JPMorgan Chase & Co., has also been quoted this quarter saying “I don’t mind paying 39.6% taxes” very much in the spirit of J.P. Morgan himself who took charge of the 1907 Panic.
For those of us on the ground looking to invest their own 2k, the market volatility is going to require more attention than usual.
Written by Freda Ding