BofA Merrill Lynch Global Research – A Research Investment Committee Report – Tuesday, 08 January 2013
The Cliff Compromise
Equities rallied sharply in the first days of the New Year, following the last minute congressional compromise on the Fiscal Cliff. While the deal was far from perfect, it averted not only a disaster for the US economy, but also a potentially painful hit to risk asset markets. Economist Ethan Harris points out that the compromise was a significant and very important first step to resolving the US fiscal picture. And critically for investors, consumers, and business leaders, it provided a measure of clarity. Though policy uncertainty will linger in early 2013, our base case for a gradual pickup in economic growth throughout the year remains intact.
Read the full report here.