“Given the partisan political structure we are glad that the deal was done yesterday. It was a reasonable outcome, we expected a deal to be reached and it should achieve around 1.6% of fiscal constraint through tax rises in 2013."
"The majority of the tax increases are for the wealthy and shouldn’t impact consumption within the economy - the last dollar someone on $450,000 earns is generally saved and not spent. However the 2% increase in payroll taxes will impact everyone therefore we expect to see slightly less spending, or at least a constraint in spending growth, this year.
From a corporate point of view, one could argue that clarity is better today than it was two days ago. Capital expenditure stopped in Q4 so it can’t get any worse but will it get better? We will be listening to Q4 earnings calls with interest. Specifically we are looking for an increase in IT spending, this was very constrained in Q4 and one sector where we expect, and would like, to see an increase in spending.
Overshadowing all of this, however, is the delay in the agreement on spending cuts, the so called ‘sequestration’. This has been pushed out by a couple of months and will be debated at the same time as an extension of the debt ceiling. This will be main part of the fiscal cliff resolution, and the political debate that we have seen regarding tax increases is small in relation to what we are about to see. We wouldn’t be surprised if the debate on the debt ceiling is as fraught as the 2011 debt ceiling debate.
As yesterday’s deal was along the lines that we expected we have made no changes to our portfolio positioning. It has provided sufficient clarity on the economy - the fact that the US should avoid recession and should see some positive economic growth. We are therefore comfortable with the shape of our portfolios. For example we remain overweight banks as we expect the housing recovery to continue and are still investing in the US energy sector (which was not impacted by the fiscal cliff debate).”
Cormac Weldon, Head of US Equities at Threadneedle Investments
Fonds Kategorien und KAGs
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