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Fiscal Cliff Kills the Market, Again

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Today's financial recap and tomorrow's financial outlook.

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MINYANVILLE ORIGINAL Stocks closed out the week on a bad note as traders continued to fret over the fiscal cliff.

In Washington, President Obama met with Harry Reid, Mitch McConnell, John Boehner, and Nancy Pelosi in an effort to break the deadlock before the year-end deadline.

While no concrete news was announced during the trading day, news reports indicated that President Obama would offer a scaled back budget plan with a tax increase on top earners, with a delay in some spending cuts and an extension for unemployment benefits.

Late in the afternoon, headlines crossed that Obama would not be offering a new plan, sending stocks sharply down into the close.

However, we've seen a lot of false rumors regarding the fiscal cliff in recent weeks, so it's important to take all of the "news" with a grain of salt.

Nonetheless, while the market was down, there were some bright spots. We saw significant outperformance in small caps and emerging markets, indicating that some market participants were in a "risk-on" kind of mood.

In economic news, the December Chicago PMI was slightly better than expected at 51.6. Additionally, the November pending home sales number came in at 1.7% vs. the 1.0% consensus.

Tomorrow's Financial Outlook

On Monday, we will see a host of economic data, including the December ISM Index, the November construction spending report, and December auto/truck sales.

Also, note that the House of Representatives scheduled a Sunday meeting, and any related news could move the market.

Overall, though, it should be a slow day as Monday is New Year's Eve.

Twitter: @Minyanville

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No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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