While no one can honestly profess absolute shock that Barack Obama has won a second term as president, an early morning sell-off in Dow, Nasdaq and S&P 500 futures tells us that there was plenty of money riding on a Mitt Romney presidency, which did not happen. Whether we're in for a tough slog today and for the rest of the week remains to be seen, but at least a major hurdle of uncertainty is now behind us.
Of course, the issue of the Fiscal Cliff -- terms of the Budget Control Act of 2011, including new tax hikes and drastic government spending cuts, especially in the Department of Defense -- now comes front and center. This is a colossal game of "chicken," whereby it comes down to who blinks first before the Budget Control Act (as of January 2013) crashes the U.S. economy.
Aside from a few gains here or there, both houses of Congress remain where they were before the election: Republicans in charge of the House, Democrats in charge of the Senate. There are fewer "radical" Tea Party members in both houses as of the new Congress, which might give the market more confidence that an agreement about the Fiscal Cliff can be reached, but with such a big decision looming, I'd expect the market to tread lightly ahead of news coming from some bipartisan closed-door sessions before 2012 is over.
Now that the election is history, I would advise investors looking for answers to assisting their portfolio to check out "5 Stocks If Obama Wins," a popular and timely write-up from Zacks.com which may come in handy during the aftermath of the election. For more information, please contact 1.800.767.3771 ext. 9339, or firstname.lastname@example.org.
In earnings news, WellPoint (WLP), the #2 U.S. health insurer, beat EPS expectations and improved on net income year over year. Revenues were unchanged from a year ago. Time Warner Cable (TWX) also beat EPS estimates before the bell today, and though revenues were down overall, guidance from the company was unchanged.
Consumer Credit figures are to be released today at 3:00 PM EST and are expected to increase by $9 billion after increasing by $18.1 billion in August.