EmailThey are still counting votes in Florida, yet that is a moot point as the balance of election results indicated President Obama will be serving a second term in the Oval Office. In turn, the election results also indicated that Congress will remain a bicameral house divided with Republicans keeping control of the House of Representatives and Democrats maintaining control of the Senate.
In brief, everything and nothing changed in U.S. politics overnight.
The "everything" part of that summation is that the election is clearly over. The outcome will not be contested. The "nothing" part of the summation is that President Obama is still president and Congress is still split.
Whether something can be pro-actively produced out of nothing is the pivotal question now, because the path to the fiscal cliff is getting shorter with the January 1 deadline quickly approaching.
The issue of the fiscal cliff compromise -- how we get there or not -- will be the focal point now for market participants.
Other issues, like developments in the eurozone debt crisis and Iran's nuclear push, will certainly matter, but the dealings on the fiscal cliff will have top billing as a market driver given the ripple effect that fiscal policy in the world's largest economy will have on global economic activity.
The main risk on this front is that partisanship gets in the way of reaching a credible compromise. Understandably, there is some concern that bitter political feelings following a long and tough race could prevent a compromise from being struck.
That sentiment could be a factor weighing on the futures market at the moment. It is hard to say considering the S&P futures rallied after the election result was known and held in positive territory in overnight trading.
Things took an abrupt turn around 7:00 a.m. ET, however. Prior to then, the S&P futures were showing a modest gain -- a bid some pundits attributed to a sense of relief that the election did not have a contested outcome.
Now, however, the S&P futures are down 11 points and are trading 0.8% below fair value.
The turn in the futures market coincided with a downturn in European markets and the euro, which some have pinned on a gloomy economic outlook from the EU that refocused attention on weak industrial production numbers out of Spain and, notably, Germany.
On a related note, the Greek parliament votes today on structural reform efforts integral to passing an austerity budget for 2013.
The latter is viewed as a prerequisite if Greece hopes to receive the troika's next bailout tranche. Reportedly, there is legitimate concern that Greece's coalition government won't produce the necessary votes for passage.
Earnings results continue to roll in, but they are not having any impressionable impact today on the market.
Even though the general election may be over, the political conversation continues to occupy the market's attention.
