Has the stock market already had its rally to celebrate a fiscal bargain – before any such deal is final?
It’s possible this is the case – and quite probable the past month’s market gains have left the major indexes less able to shrug off any possible false starts, delays or threats of “no deal” in the ongoing talks to bridge the divide on taxes and spending separating President Obama and House Republicans.
The market never waits patiently for the all-clear signal of a definitive headline before trying to price in expected news.
This helps explain why the Standard & Poor’s 500 index has gained nearly 7% in the past month, to rise above 1,440, as the biggest economic story has been the impending “fiscal cliff” – and the main plotline in this story was the lack of progress in negotiations.
The Prevailing View
Since around Election Day, the prevailing view of market handicappers has been that the uncertainty of the fiscal future was restraining the market, but that, onceRead More »from Stocks Clap for Fiscal Deal — Before We Have One