The political environment tops the news stories that are impacting investor's economic outlook.
How President Obama and Congress are dealing with the economy is a more compelling storyline than the economy itself, according to Affluent investors. More than a quarter (28 percent) said that the political environment was the news story most affecting their economic outlook this month. Of these investors, nearly a third (32 percent) of Millionaires, are keeping a close watch on Washington.
The month began with pundits weighing the political stakes of the down-to-the-wire agreement to raise the debt ceiling. Less than a week later, Standard & Poor’s made the unprecedented decision to lower the country’s credit rating a notch to AA-plus. The credit rating agency questioned “the effectiveness, stability and predictability of American policymaking and political institutions.”
With the announced Republican presidential candidates weighing in on these and other events, it is no wonder that concern over the political environment is at its highest since last November, when the mid-term elections dramatically shifted the balance of power in Congress.
The volatility of the stock market in the wake of the S&P downgrade was cited by 12 percent of investors as the news story most impacting their economic outlook. This is four-times as many who responded similarly when this question was asked last May.
Investors said their economic outlook was also impacted by other closely-intertwined issues, including unemployment (10 percent), the economy (9 percent), the deficit (8 percent), and international problems (7 percent) such as Europe’s own debt crisis.
All of these tumultuous events took investors’ minds off gas and oil prices.