Economic Fears May Undercut Fourth-Quarter Growth

A growing number of analysts believe the stock market cannot match its 5% advance in the third quarter. Among the most obvious reasons are worries that the fiscal cliff will slow or reverse hiring among businesses that are concerned about tax increases, as well as a general nervousness about the national economy.

Many observers of political behavior in Washington do not expect decisions on taxes or the budget until well into 2013, particularly if one party controls the White House and another either the House or Senate. Add to that consumers who also worry about tax increases and their jobs. Europe will continue to be a factor. On a broad scale, the crisis there is in the news every day, which cannot help confidence in the United States. And most experts believe that the earnings of public companies with large Europe operations and sales will be undercut by the region's recession, hindering the recovery of America's export economy.

Indices may be at or near all-time highs, but that creates earnings multiples that will be hard to sustain, if even one or two of the concerns about the state of American business come true.

Douglas A. McIntyre


Filed under: 24/7 Wall St. Wire, Economy, Politics Tagged: featured

Increase your money and finance knowledge from home

Finding Stock Ideas

Learn to do your research and find investments.

View Course »

Introduction to ETFs

The basics of Exchange Traded Funds and why ETFs are hot.

View Course »

Add a Comment

*0 / 3000 Character Maximum