For the fourth week in a row, the U.S. fiscal cliff topped the list of investor fears about the stock market. With all the media attention heaped on the fiscal cliff since the election, it should come as no surprise that the fiscal cliff outpolled the second-place European sovereign debt crisis by 10.9%, the widest margin since the Fear Poll began four weeks ago.
Concerns about continued weak corporate earnings held on to the #3 spot, even as the earnings season winds down, while anxiety about problems related to excessive central bank interventions moved into the #4 slot. Among write-in votes, the biggest issue is frustration with government and politicians, which is certainly related to some of fears about how the fiscal cliff and euro zone problems will be resolved.
The Americentric perspective was once again in evidence this week, with U.S. respondents seeing the fiscal cliff as more concerning than the European sovereign debt crisis by 16.2%, while non-U.S. respondents saw the two issues as almost equally important, with the fiscal cliff winning out by only 1.8%. Interestingly, this parochialism seems to be a largely American phenomenon, as Israeli respondents have been less concerned about Iran than non-Israeli respondents and German respondents have been less concerned about the European sovereign debt crisis than the rest of the world.
With the U.S. elections now in the rear view mirror, U.S. respondents were no doubt at least partly influenced by the media pivoting away from the elections and toward the fiscal cliff issues – a development I analyzed yesterday in The Rise of Fiscal Cliff Concerns.
Thanks to all who have participated in these polls and have helped to generate a very interesting data set. Clearly we have a lot to learn about what drives fear and how those fears can be amplified by geography, media and proximity in time.