Let's face it. As much as these self-made fiscal calamities have served to further divide and polarize the two sides in Washington, politicians love to be in the spot light. Now that we've hit two of the three "fiscal cliff" moments that we will face in as many months this year, it's tempting to say that investors are on edge over the $85 billion in Federal spending cuts for this year.
But sorry to break it to you Washington, but Wall Street and Main Street are onto your tricks.
"I think (the early) pullback today really could be short-lived, and none of this has to do with the sequestration," said David Lutz, head of ETF Trading at Stifel Nicolaus. Lutz joined us for live coverage of the market open today, which saw stocks fall as much as 100 points in very early trading, only to make back those gains in the next hour.
He, like many other investors, has shifted attention down the road, and not just to the funding battle (known as the continuing resolution) that's coming in 4 weeks, but even further ahead.
"Smart money is already gearing towards a May date when the debt ceiling comes back into play," Lutz says, pointing out yesterday's advisory from Fitch that the U.S. is at risk of a credit rating downgrade if it doesn't make credible progress on a long term deficit reduction strategy. Add in some sketchy manufacturing data overnight from Europe as well as recent steps by China to tighten up its property market, and you have yourself a veritable world of hurt to worry about.
"The problem we have right now is that the certainty we have out of (Washington) is that they are not going to get along or get a deal done anytime soon," he says.
So lawmakers, it's time to quit scaring us with budgetary threats, get back to work, and let us do the same.
