Businesses are already planning to spend less in 2013 due to the impending fiscal cliff, attendees of the National Association of Corporate Directors Directorship 100 conference in New York said Tuesday. Company directors are worried that uncertain consumer demand and tax policies next year could make it irresponsible for them to make long-term investments.

"We've pulled back on our capital planning for 2013," Ellen Kullman, chairman and CEO of chemical maker DuPont , said in comments to the conference in New York on Tuesday. "We can't in good conscience put that money into the ground and create new plant sites or make improvements to our existing plants if we don't think the return is going to be there soon enough, so we're taking a wait and see attitude," she added.

The uncertainty over what kind of deal lawmakers will strike and when they will make it is creating an environment where "people don't have confidence that it's time to invest," said James D. Robinson III, presiding director at The Coca-Cola Company, at the conference. He said the lack of certainty about the direction of the economy leads to questions about whether consumer demand will be enough to support investments.

David Fuller's view Uncertainties regarding two events for 2013 are temporarily dominating sentiment on Wall Street and in board rooms throughout the USA. They are the fiscal cliff and the certainty of higher taxes for most corporations and also people with above average incomes, although the precise levels are not yet known.

I assume that the fiscal cliff issue will be resolved before Christmas, and the sooner the better. Meanwhile, Democrats hold most of the power and few Republicans would want to be blamed for failure to reach an agreement, since that would probably represent political suicide.

Meanwhile, many US corporate decisions are temporarily in limbo, at a cost in terms of important policy decisions which increases with time. That is a temporary headwind for share prices and GDP growth. However, a market bounce is likely once the cliff is avoided, particularly if terms are generally regarded as less onerous than feared.

Note - You may also be interested in recent discussions of taxes during President Obama's second term, written by both Eoin and me. Use the 'Search' facility shown above left, fourth item down, and search under the word taxes. Alternatively, click on 'Previous Item' under your name above, and see the taxes comments for 23, 19, 16, 8 and 7 November.

Despite the possibility for a stock market rally once the fiscal cliff is successfully avoided, and the sooner this occurs the better, we can expect some additional profit taking, particularly by wealthy US investors, before yearend.