European Stocks Shrug FOMC Gains As Eyes Turn To Greece, Fiscal Cliff

European Stocks Shrug FOMC Gains As Eyes Turn To Greece, Fiscal Cliff

European shares started the session on Thursday with a bearish footing following pre-FOMC decision gains. The euphoria quickly starts to disappear as eyes turn to lingering problems in Europe and the looming fiscal abyss in the United States.

The Federal Reserve yesterday added another round of easing announcing new $45 billion monthly purchases of treasuries added to the $40 billion monthly purchases of MBSs. The Fed tied the accommodative policy to clear cut 6.5% unemployment target and steady inflation below 2.5%.

More easy money for the market is always a blessing, but the risks are high this time around indeed! The market fears of the looming fiscal cliff surfaced once again as Bernanke warned that the monetary policy will have no impact to undo the damage; shaking the market in fears yet once again.

Washington is still playing the match-politics game and the clock is ticking. We surely can’t say there has been substantial move toward a deal and the persistent deadlock coupled with a preemptive Fed move signals to the market that a miracle cure is not just around the corner!

Confident markets of a dear are once again jittery and trimming prospects for a breakthrough; a band-aid deal could only be the final result before the end of the year!