The fickle US investors and media wanted a correction after a rise and this selling which is attributed due to cause and effects of "Fiscal Cliff", is simply negating the reality. Yes, there could be a caustic debate over $600 billion in spending cuts and tax increases due to kick in next year, but that does not prove in anyway, that Mr.Mitt Romney, could acted as bulwark; when everywhere fine tuning is the name of the game.
Also, I seriously feel that after 4 years of Barrack Obama's rule it is simply insane to think that such exercise could derail the economic recovery or get trapped in what is nicknamed as "fiscal cliff". This is simply another of those propaganda, after a narrow defeat of the Republicans.
The US is still a very much racial country, and the divide between black and white is as gaping as ever. Many said, that if American (US) voters were 76% white, rather than 72%, then Sen Mitt Romney would have been President. Mt.Mitt Romney won nearly two third of the white vote, only goes to show why Mr.Barrack Hussein Obama spoke of inclusiveness’ that and diversity, instead of "exceptionalism", as Romney espoused it, while talking of chasing a US dream.
However, this phenomenon is not new to the US, a land of immigrants; as history says this happened to Nixon in 1968, when he was able to basically split the democratic party in two along religious and race lines and get the support of one half. This ratio could make you cynical and give you a sudden jerk. On the flip side this kind of voting pattern, based on "Melanin Levels", also has some connection with the Melanin theory, a pseudo-scientific, racist theory which assert that the possession of greater quantities of melanin causes an inherent superiority of black people. Conversely, its lack demonstrates the alleged inhumanity and inferiority of white people. So, the oldest democracy is showing a latent divide?
If President Obama was not able to resolve, the fiscal cliff, before the elections that does not mean he would not be able to solve that at all. It is because in a hart hitting and emotional speech, post his re-election, he has expressed his desire to drive things home which are of national interest through consensus and by holding discussions with the opposition/s.
The sell-off in the United States was compounded by sudden rise of concerns in Europe, a key market for many US companies. This sudden rise in concern is a media generated story and is often used by the market manipulators to achieve their goals.
However, it is a fact that European Commission said, the euro-zone economy will barely grow next year, only picking in 2014. According to it: the region's economy would grow only 0.1 per cent in 2013 after a bigger than previously forecast contraction this year. These news were already there, but media suddenly picked them up, so that a long due correction can be completed in the US and probably today in Europe.
The Dow Jones industrial average was down 305.88 points, or 2.31 per cent, at 12,939.80. The Standard & Poor's 500 Index was down 31.49 points, or 2.20 per cent, at 1,396.90. The Nasdaq Composite Index was down 69.66 points, or 2.31 per cent, at 2,942.27. The S&P 500 also below the key 1,400 level for the first time since Sept. 4.
Wednesday's drop is a reversal from the previous session's gains when voting was under way. Defense and energy shares were among the market leaders that day, causing speculation that some investors were betting on a Romney win.
Healthcare stocks also fell, as President Obama's re-election rules out the possibility of a wholesale repeal of his healthcare reform law, but questions remain as to what parts of the domestic policy will be implemented. The S&P health care index lost 2.5 per cent.
The S&P financial index fell 3.1 per cent and shares of Bank of America slid 5.5 per cent to $9.39.
In 2008, stocks also rallied on election day, but then fell by the largest margin on record for a day following the vote, with each of the three major US stock indexes posting losses ranging from 5 per cent to 5.5 per cent. And like this time, at that also the Western Press, spun dangerous stories of doom and gloom, which never came out to be correct.
Meanwhile, FICCI expects the new administration is expected to set the US economy firmly on the path of revival and robust growth. This would be of great significance for the world economy and Indian exporters should be looking at a sustained rise in demand in the US. Hence, this is just a routine fall and the investors and traders should use this opportunity to pick up good stocks and prepare for the next rally in the world-wide bourses.