The More Things Change...

January 17, 2013


Although there remains some uncertainty due to the continuing post-Hurricane Sandy data volatility, the economic expansion is intact for now; and the market powered higher despite all the hoopla surrounding the fiscal cliff, leaving investors on the sidelines losing ground.
-Liz Ann Sonders, chief investment strategist, Schwab

-Brad Sorensen, director of market and sector analysis, Schwab
-Michelle Gibley, director of international research, Schwab

Key Points

  • Fiscal cliff part one was largely averted but there will still be a fiscal drag on the US economy. We believe there are enough positive factors to largely absorb the blow at this point and remain positive on stocks; but the debt ceiling/sequestration fight to come could mean volatility comes back.
  • Kicking the can may be the way things get done in Washington for the foreseeable future and the next two months will likely see more of the same. Meanwhile, the Federal Reserve continues to provide unprecedented amounts of stimulus.  
  • Europe still faces numerous headwinds but slow progress is being made, while China's growth has reaccelerated and we're closely watching Japan's new government's attempts at stimulating activity.   

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