The US stock index futures opened lower today after last night’s results of the US presidential election.
Now that the elections are over, political uncertainty no longer plays a part in influencing the stocks and investors focus can return to other matters, such as the $600 billion in spending cuts and tax increases that will be introduced next year, which in a worst case scenario could derail an economic recovery.
Art Hogan, the managing director of Lazard Capital Markets, said that “unfortunately, the honeymoon doesn't last very long in real time and we knew that regardless of the outcome of the election, our focus would immediately be shifted to the fiscal cliff, which is going to be difficult in and of itself.”
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“Away from that, we had moved European concerns to the backburner in the near term, and we are going to get back to focusing on them as well - we haven't changed the makeup of a global economy with an election in the United States, and like it or not, we have to shift our focus back to that.”
The President of the European Central Bank (ECB), Mario Draghi said that the EU economy will remain weak, and that the member state governments must persevere with their efforts to create a closer financial, fiscal, economic, and political union.
Energy shares may also come under added pressure as Obama has promised to create more regulations for companies working in the sector, granting less access to federal lands and water.
By. James Burgess of Oilprice.com
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