expect a short term correction tomorrow as obama and the house wrapping up the sequestration drama. It won't be a pretty picture, since the two parties are playing hot potato, and we have the march 27th spending expiration may 18th federal debt limit looming over. it's still a long time, but the market won't let it pass without using them as excuses for short-term correction.
but thinking about it now, the influence of the spending cut weighs more on government agencies than it does on the financial industry. and fiscal cliff on the other hand, had direct effect on corporate tax policies which could be the reason behind the market reaction.
There definitely will be long term detrimental effect on the economy as the $85B materialize itself in the market. yea correction will come