Fiscal cliff euphoria fades as investor caution returns
January 4, 2013
The market rally eased on Thursday as the initial euphoria over a fiscal cliff deal faded and attention turned to further negotiations in coming months.
In Asia the Hong Kong's Hang Seng Index rose marginally and hit a 19-month high before falling and the index was down 0.1pc as it neared the end of trading.
Markets in Japan and mainland China were closed for extended holidays.
Just before the New Year, the US Treasury Secretary Tim Geithner indicated that the federal government would run up against the debt ceiling - a legal cap on its total borrowing set by Congress - by the end of February, which will need to be voted on again as it was in August 2011.
Paul Reilly at Clear Currency said: "While the vote averted immediate pain like tax hikes for almost all U.S. households, it did nothing to resolve other political showdowns on the budget that loom in coming months.
"Congress must now act as early as mid-February to prevent a default and the dispute may reprise a similar 2011 episode that led to a downgrade of the U.S. credit rating."

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Posted by Ken at 4:50 AM