Four interesting bullet points here from Morgan Stanley’s Cross-Asset Strategy team.
1. The lifting of US election uncertainty is even more relevant for markets than the actual election outcome, in our view.
2. The “fiscal cliff” is approaching: an extremely uncertain outcome, but post-election it’s easier to envision a forging of an interim deal that would remove another key uncertainty.
3. Rebuilding efforts following Hurricane Sandy, which are expected to boost economic output.
4. Europe is once again in Crisis, and per the CRIC cycle framework, we expect a Response.
#2 might be the most interesting of these right now.
Prior to the election, the assumption was that for sure we were in for serious gridlock, especially with the assumption that the split DC would remain. And that’s still the default to some extent, but at the moment, there are some hopes for a thaw.
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