Fiscal Cliff Crunch Time ((( One Perspective )))
Time is running very short for any agreement to alter the current "fiscal cliff" legislation due to take effect January 1. S&P futures suggest a modest up open - but that was also the case yesterday before an ensuing mid-day sell-off. Underlying sentiment is fragile.
Congress reportedly will resume negotiations today on fiscal issues. Whether or not any deal will be reached is as debatable as the economic consequences of the vast multitude of issues involved.
Asian stock markets were mixed, with China down and Japan up. European exchanges are fractionally higher.
New claims for unemployment for the week ended December 22 fell 12,000 to 350,000. This is slightly better than the recent underlying trend and better than expected. Nevertheless, the data understandably didn't precipitate much market response given other concerns.
It is all about the fiscal cliff now. Headlines out of Washington could lead to over-reaction and volatile swings in the markets. Optimistic statements from politicians (and pessimistic ones as well) could reflect political posturing as much as true progress. Or, there finally could be real progress. There are many that believe Washington will act now that it is truly crunch time.
For all but the most risk-tolerant market participants, it is a time for patience rather than action. There is simply no way to effectively analyze how the market fundamentals will be impacted by political developments.
Dick Green
Chairman, Briefing.com
Focus Focus Focus Focus !!!!
