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Pre-Market Primer: Hopes of Fiscal Cliff Compromise Fade

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Stocks fell after politicians are becoming less optimistic that the fiscal cliff will be resolved before the deadline.

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MINYANVILLE ORIGINAL Hopes that the fiscal cliff will be avoided are fading fast, and markets are selling off in anticipation of a tumultuous week.

"It's the first time that I feel it's more likely that we will go over the cliff than not," Senator Joe Lieberman, an Independent from Connecticut, told CNN. "If we allow that to happen it will be the most colossal consequential act of congressional irresponsibility in a long time, maybe ever in American history because of the impact it'll have on almost every American."

Lieberman also said that he expects that Congress will spend New Year's Eve in its chambers.

Senator Bob Corker of Tennessee told CBS, "Obviously this is going to drag on into next year, which is going to hurt our economy"

House Speaker Boehner and President Obama are not actively negotiating during the Christmas recess. Congress has just four short days to come to an agreement before the automatic spending cuts and tax increases -- which were put in place for the sole purpose of holding the Sword of Damocles over the US economy and motivating lawmakers to come up with a budget they can deal with -- go into effect.

There is still hope that a stopgap measure will be approved.

Futures are down this morning. Before the opening bell, Dow (INDEXDJX:.DJI) futures were fell 0.22% to 13,107. Futures contracts on the S&P 500 (INDEXSP:.INX) declined 0.27% to 1,422.10 and Nasdaq (INDEXNASDAQ:.IXIC) futures climbed 0.27% to 2,653.25.

The nervousness and uncertainty also affected Asian shares. Most European markets are already closed today. There are no major economic announcements today and US equities markets close at 1 p.m. EST.

ComScore released its data on holiday online shopping yesterday. During the first 51 days of the shopping season, all online spending totaled $38.7 billion, a 16% gain over the year before.

Goldman Sachs picked up coverage of General Motors (NYSE:GM) as a buy with a $35 price target. GM has announced plans to buy back shares from the government, which bailed it out after the financial crisis. Goldman Sachs analysts say that GM will benefit from a fresh product cycle and stable input costs.

Incoming Japanese Prime Minister is threatening to take away the Bank of Japan's independence from Parliament. Shinzo Abe, whose party trounced the opposition in this month's elections, is pressuring the BoJ to formally adopt a 2% inflation target to finally break the spell of deflation and a strong yen and help exporters.

Twitter: @vincent_trivett
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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