Stocks were roughly flat on Friday as we received some lackluster economic data.
The November Chicago PMI was slightly light, relative to expectations, at 50.7. We also saw the October personal income and personal spending numbers come in below expectations. This came just one day after a weaker-than-expected GDP number and poor sales numbers from publicly traded retailers.
Despite increasing concerns over a slowing US economy, the S&P 500
(INDEXSP:.INX) closed in positive territory, and crude oil was up, which is normally a positive indicator for a so-called "risk-on" trade. Additionally, US Treasuries sold off a bit.
However, there was notable weakness in financials and small caps, with the KBW Bank Index
(INDEXDJX:BKX) and Russell 2000
(INDEXDJX:BKX) both underperforming the S&P by a decent margin.
In fiscal cliff news, Minority Senate Leader Mitch McConnell appeared on CNBC, stating that Republicans are seeking changes in entitlement eligibility, and increase in tax revenues but not tax rates. This is more or less business as usual for Washington, but it is important to note because this kind of news has tended to move markets as of late.
On Monday, we will see October construction spending numbers, as well as the November ISM Index and auto sales reports. There are no major earnings reports on the calendar.
We noted above that fiscal cliff-related news and events have been moving markets as of late. Therefore, it's worth monitoring the news cycles for appearances by powerful politicians like President Obama, John Boehner, Harry Reid, Nancy Pelosi, and the aforementioned Mitch McConnell.
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