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Pre-Market Primer: Still No End in Sight for Cliff Negotiations


Obama will host congressional leaders at the White House this afternoon for a last-ditch effort at fiscal cliff discussions.

MINYANVILLE ORIGINALYet again, investors' attention will focus on the president's last-ditch efforts to avoid the fiscal cliff today.

Congressional leaders will be meeting with President Obama at the White House this afternoon to try to iron out a deal, but there is little hope at this point that this will be finished before the automatic spending cuts and tax increases kick in on January 1. Senate Majority Leader Harry Reid despaired, saying, "I don't know timewise how it can happen now."

After a headline-driven day, US stock futures are pointing toward a lower opening today. Before the opening bell, Dow (INDEXDJX:.DJI) futures were down 0.48% at 12,941. Futures contracts on the S&P 500 (INDEXSP:.INX) fell by 0.57% to 1,402.60 and Nasdaq (INDEXNASDAQ:.IXIC) futures dropped 0.51% to 2,609.25.

Pending home sales increased by 1.8% in November, according to economists' estimates. In October, the leading indicator jumped 5.2%. The National Association of Realtors will release its count of signed, but not closed, contracts at 10:00 a.m. EST today.

The Nikkei Index (INDEXNIKKEI:.NI225) extended gains despite a disappointing data dump. Retail sales rebounded 1.3% in November after falling 1.2% the month before. Sales of winter clothing led consumer purchases while vehicle sales lagged due to the expiration of subsidies on low-emission vehicles. The unemployment rate ticked down to 4.1% from 4.2%. Household spending trailed expectations, rising only 0.2% in November.

Industrial production dropped 1.7% last month. Manufacturing PMI for December showed an acceleration in the sector's contraction. The index fell to 45.0 from 46.5. Readings below 50 indicate that activity in the sector is contracting.

Consumer prices, a major focus for public policy after this month's election, continue to show deflation. Prices fell 0.4% between October and November, or 0.2% from the year before. The new government, led by Shinzo Abe, is making a weaker yen and a 2% inflation target a priority.

Hewlett-Packard (NYSE:HPQ) says that the US Justice Department has begun an investigation into accounting improprieties at Autonomy Corp., the software company that HP bought last year. Last month, HP took an $8.8 billion writedown on the company after finding the irregularities.

Home improvement retailers Home Depot (NYSE:HD) and Lowe's (NYSE:LOW) could be hit by a possible strike that could paralyze ports on the East and Gulf Coasts. The retailers' busiest season is in the spring, and delays in importing goods could sharply reduce available stock. The International Longshoremen's Association will call on 15,000 workers to walk off the job if a new deal isn't in place by December 29. Under the Taft-Hartley bill, the president has the power to intervene in a strike if it is deemed a national security priority.

Twitter: @vincent_trivett
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