Expect an Improving Outlook in 2013

Perhaps it is appropriate that 2012 will end amid suspense over Congress' ability to agree before midnight on legislation averting the worst of the fiscal cliff. I still see odds of success at just above a toss-up, and I assume that anticipation of such a result might give an early boost to equity prices. Nevertheless, "nothing done" remains a possibility -- or a TARP moment in the House that could reverse sentiment and lead to volatility throughout the day.

Even the scope of a deal remains in question, with the destructive impact of across-the-board defense and non-defense spending cuts that could emerge in any event finally winning focus. Prospects for inclusion of a fix for the sequester seem a push at best, with major upside -- or downside -- seemingly in store for defense stocks as a result. Perhaps more certain in the event of a deal would be relief for health care providers at risk to a 27% reduction in physician fees, although this would be tempered by Medicare-related cuts should a sequester be triggered....666 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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