Some firms may feel that they've made it to the far side of the fiscal cliff scare and seen the worst of it. The stock market has been showing strong signs of recovery in the weeks since the new year, but now is not the time to celebrate. There could still be problems further down the road for those without a strong enough financial plan.
Lacking in resource options
The Austin Business Journal reported that major corporations may see the worst backlash, but smaller companies will likely need to reassess their financial services and other money management tools to minimize the negative effects anticipated in coming reports. Budgetary fluctuations at the end of the previous year were triggered by uncertainty in the financial future as outlined by the fiscal cliff, and since there was no action to remedy these issues until the beginning of 2013, there was no sign for investors to resolve their portfolios.
The result could be extreme in terms of fourth-quarter reporting, Reuters wrote. A lack of spending and portfolio management could wind up producing monetary setbacks for many companies, and financial investment advice from here on could result in similar plunges if issues aren't resolved quickly.
"CIOs and CFOs were not making investments," said Forrester Research analyst Andrew Bartels. "If Boehner and Obama had been able to strike a deal by around December 15, we would have had end-of-quarter investments."
Business issues expected in the future
The perpetuation of these roller-coaster financial reports may be due to investment uncertainty in the future. As firms see warning signs in the Asian and European theaters, pointing toward unstable markets ready to break at any time, businesses and consumers alike will be tightening their belts and holding back on spending. This in turn will continue the cycle of rising and plunging financial indicators.
Major businesses in the technology sphere are expected to see the most harm from the fiscal cliff crisis, Reuters wrote. Since these kinds of firms service nearly every other market, companies in need of new computers and other machines will likely have to restructure their growth plans, making due with old technology until other options become more affordable.