As you can appreciate, my sentiment was cautious leading into the end of 2012 with the Bush era tax cuts set to expire. As suspected, U.S Congress came through at the last minute with their usual political posturing leading to the final vote. Now that we avoided the “fiscal cliff”, the markets are bracing themselves for the next U.S Government vote which is the “debt ceiling debate”. If you recall, the last time this vote took place the U.S market experienced a 10% correction coupled with a downgrade of the U.S from Standard & Poor’s rating agency. Once again, I am having to manage client expectations with events that are macro-related and not company specific. In short, headlines – and not fundamentals – may dictate the course of the next few months.

Although the new year has begun with relative strength in the market indices, I still continue to have a “wait and see”” attitude as we are currently in the middle of earnings season, the debt ceiling debate has to unfold, Europe continues to have major unemployment and recessionary economies, and the World Bank just last week cut their growth forecast for developed nations. As a matter of interest, I enclose the article from Bloomberg on the World Bank report.