Global economy on pause for U.S. election result

Americans will be watching the election results closely as they begin to roll in. The same is true for many economists and investors around the world as the election holds global significance.

Regardless of which candidate wins, investors and analysts are hoping the next president will be able to avoid the fiscal cliff, the automatic tax increases and spending cuts set to kick in next year. If Congress is unable to work out a solution, the U.S. is at risk of plunging into recession and bringing other economies down with it.

When the markets open tomorrow, there is also a third possiblity — that no clear winner will be decided. If this happens, Juli Niemann of Smith Moore & Company says uncertainty will continue for businesses and investors and as a result, she predicts, “the stock market drops like a rock, probably over eight percent — this happened last time with the Bush/Gore election.”