Pre-Market Primer: Holiday Spending Rose at Weakest Pace Since 2008
Democrats are hoping to pass a stopgap measure if no compromise is reached.
President Barack Obama urged his peers in the House of Representatives to draft an interim bill to stop the $600 billion of spending cuts and tax increases that are scheduled to automatically go into effect on January 1, 2013. Republicans failed to pass their own bill, which would have preserved tax breaks on those earning less than $1 million. Obama and the Democrats will continue to press for a lower earnings limit for tax increases.
Dagong Global Credit Rating, a Chinese ratings agency, put the United States' credit on negative watch due to the political impasse.
"The political conflict and the defect in national debt management have pushed the creditworthiness of the federal government to the cliff again," Dagong analysts wrote. "After the US federal government debt limit crisis caused by the partisan quarrels in August 2011, it has evolved into the current fiscal cliff and debt limit crisis due to the same reason. It once again highlights that the decline of the US federal government's capacity in interest integration and decision-making is the political reason of the weakened solvency."
Futures on the Dow Jones Industrial Average (INDEXDJX:.DJI) rose 0.18% to 13,088 and S&P 500 (INDEXSP:.INX) futures gained 0.20% to 1,422.70. Nasdaq (INDEXNASDAQ:.IXIC) futures rose 0.23% to 2,654.75.
At 9:00 a.m., the Case-Shiller Home Price Index for October will be released. Economists expect the index to indicate that house prices in the 20 urban areas that it tracks increased by 0.5% after rising 0.4% in September.
MasterCard Advisors SpendingPulse said that Hurricane Sandy interrupted shopping and the fiscal cliff debacle soured shoppers' moods this holiday season. Retail sales rose by 0.7% between October 28 and December 24, according to the independent research firm. This is the smallest increase in sales since the financial crisis hit in 2008. Sales grew by 2% over the same period last year.
Japan's Nikkei Index (INDEXNIKKEI:.NI225) rose another 1.49% today and the yen fell to 85.38 against the greenback after Shinzo Abe formally took his seat as Prime Minister. Abe vows to devalue the yen to make Japanese products more competitive and might take away the Bank of Japan's independence to do so.
Netflix (NASAQ:NFLX) service was disrupted on Christmas Eve. The video streaming company blamed an outage at an Amazon (NASDAQ:AMZN) Web Service data center for the untimely service gap.