The huge sigh of relief as America dodged the fiscal cliff was as large as the rally seen in markets, with the FTSE 100 reaching an 18-month high and the Dow Jones set to add almost 2% at its open.
But very little has changed, analysts and fund managers are warning, arguing that a short-term political fix should not be seen as a pivotal moment for markets.
'The macroeconomic problems, geo-political issues and domestic governmental strife will continue to dominate the headlines in 2013,' said Max King, Investec Asset Management strategist.
He added that from an investment perspective, positioning in well-run, cash generative companies would continue to be the safest option.
'Political muddle, mistakes and self delusion will be as much of a feature of the investment landscape in 2013 as they were in 2012,' King explained.
King added investors needed to keep their eyes on global growth as well as the fiscal cliff, because 'for better or for worse', deal would not be a turning point.
Monument Securities' Stephen Lewis said that while action to extend benefits for America's unemployed and extend George Bush's middle-class tax cuts would avert a squeeze on households, but this may be one of a few positive outcomes of the American Taxpayer Relief Act passed by the House of Representatives late last night.
Lewis pointed to the Congressional Budget Office (CBO) estimate that the measures in the Act will add close to $4 trillion to US federal deficits over the decade to 2022, and of this, $3.57 trillion is reckoned to be the cost of keeping the Bush tax cuts going.
'Though the CBO has yet to publish a full analysis of the economic impact of the measures taken, and is unlikely to do so until [Barack] Obama presents the annual budget, it seems its deficit projections would be consistent with the federal deficit/GDP ratio declining to 2%-3% by fiscal year 2016 and staying in that range in the period up to 2022. The debt/GDP ratio would be as high in 2022 as it is at present,' Lewis explained.
Moreover, if US policy makers took fright at the brinkmanship seen in the final months of 2012, they will find the talks on spending cuts even more startling.
'Agreement may be especially hard to reach, seeing that Republican congressmen may well have lost confidence in a party leadership that appears to have taken them to a bad place,' Lewis said. The test of this will be the votes on leadership in the House of Representatives.
In any event spending cuts will have to come, though analysts do not expect to see any impact this year. They are also unsure of where the axe will fall and expect this to affect corporate confidence.
'The uncertainty over where spending cuts will fall persists and will prolong the corporate sector's anxieties over future demand, especially in capital goods industries,' Monument's Lewis cautioned.