Wednesday, September 19, 2012

Will U.S. Fiscal Cliff Kill Stock Rally?




The global rally in stocks will fade as a U.S. budget dispute in Congress and November’s presidential election will stifle growth in the world’s biggest economy, according to Copenhagen-based BankInvest.

BankInvest, which manages $17 billion, advised clients to reduce holdings of equities and sold shares from its own portfolios amid concern the political uncertainty will keep U.S. companies from hiring and making investments until the start of 2013, Frank Velling, the company’s chief strategist, wrote in e- mailed comments.

“The main obstacle for economic growth is the unusually high wall of uncertainty related to the presidential election and the fiscal cliff,” Velling said. “It increases the value of waiting…..”

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