Dow jumped 166, advancers over decliners 4-1 & NAZ added 59 The Financial Index was up 1+ to 220. MLPs joined in the rising markets with the index exploding 6+ to 385 & the REIT index rose 2+ to 267. Junk bond funds were higher & Treasuries pulled back as stocks rose. Oil went up on optimism
that negotiators will reach a last-minute budget deal that
would avert $600B of tax increases & spending
cuts that threaten economic growth. Gold rose on central bank stimulus moves (betting against throwing money at problems).
Photo: Bloomberg
Obama said that a deal with Congress to avoid tax increases looming at midnight, was close, but he warned that it was not yet complete. "Today it appears that an agreement to prevent this New Year's tax hike is within sight, but it is not done," he said at the White House. "There are still issues left to resolve, but we're hopeful that Congress can get it done, but it's not done." Obama said the deal would ensure that taxes do not go up for middle income families. He stressed that it would include an extension of unemployment benefits for the long-term jobless & extension of popular tax credits. The agreement being worked out with Reps would not include a long-term solution to the gov debt problem. "My preference would have been to solve all these problems in the context of a larger agreement, a bigger deal, a grand bargain, whatever you want to call it that solves our deficit problems in a balanced and responsible way," he said. "But with this Congress that was obviously a little too much to hope for at this time. Maybe we can do it in stages. We're going to solve this problem instead in several steps." The outlines of a deal in the Senate include raising income tax rates for individuals making more than $400K a year & households making more than $450K a year, but a sticking point remains on how long to delay automatic spending cuts to defence & domestic programs. Obama stressed that a deal over those spending cuts had to include revenue. "Any agreement we have to deal with these automatic spending cuts that are being threatened for next month, those also have to be balanced," he said. "That means that revenues have to be part of the equation in turning off the sequester, in eliminating these automatic spending cuts, as well as spending cuts."
Obama says fiscal cliff deal in sight, not done yet
Several hours remain in 2012 & the proposed deal is far from done. As expected this is just a Scotch Tape approach to solve huge financial problems. The House still has to sign off on it, although there is a fair chance it will bend to the pressure to "get something (that means anything) done." The idea is continue with more out of control spending & tomorrow will take of itself. I don't know about that. Everybody has gotten used to solving problems by kicking the can down the road. But really solving the problems & raising the debt ceiling (we are already maxxed out) will be dealt with in the next few months. Unsaid, but a definite possibility, is a credit downgrade could be in the offing. Markets are celebrating a little early.
In the meantime:
AMJ (Alerian MLP Index tracking fund)
| CLG13.NYM | ...Crude Oil Feb 13 | ...91.77 | .... 0.97 | (1.1%) |
| GCF13.CMX | ...Gold Jan 13 | .......1,677.10 | ... 22.20 | (1.3%) |
Photo: Bloomberg
Obama said that a deal with Congress to avoid tax increases looming at midnight, was close, but he warned that it was not yet complete. "Today it appears that an agreement to prevent this New Year's tax hike is within sight, but it is not done," he said at the White House. "There are still issues left to resolve, but we're hopeful that Congress can get it done, but it's not done." Obama said the deal would ensure that taxes do not go up for middle income families. He stressed that it would include an extension of unemployment benefits for the long-term jobless & extension of popular tax credits. The agreement being worked out with Reps would not include a long-term solution to the gov debt problem. "My preference would have been to solve all these problems in the context of a larger agreement, a bigger deal, a grand bargain, whatever you want to call it that solves our deficit problems in a balanced and responsible way," he said. "But with this Congress that was obviously a little too much to hope for at this time. Maybe we can do it in stages. We're going to solve this problem instead in several steps." The outlines of a deal in the Senate include raising income tax rates for individuals making more than $400K a year & households making more than $450K a year, but a sticking point remains on how long to delay automatic spending cuts to defence & domestic programs. Obama stressed that a deal over those spending cuts had to include revenue. "Any agreement we have to deal with these automatic spending cuts that are being threatened for next month, those also have to be balanced," he said. "That means that revenues have to be part of the equation in turning off the sequester, in eliminating these automatic spending cuts, as well as spending cuts."
Obama says fiscal cliff deal in sight, not done yet
Several hours remain in 2012 & the proposed deal is far from done. As expected this is just a Scotch Tape approach to solve huge financial problems. The House still has to sign off on it, although there is a fair chance it will bend to the pressure to "get something (that means anything) done." The idea is continue with more out of control spending & tomorrow will take of itself. I don't know about that. Everybody has gotten used to solving problems by kicking the can down the road. But really solving the problems & raising the debt ceiling (we are already maxxed out) will be dealt with in the next few months. Unsaid, but a definite possibility, is a credit downgrade could be in the offing. Markets are celebrating a little early.
In the meantime:
Happy New Year!!
Dow Jones Industrials
1 comment:
I was actually somewhat suprised to see this happen. I thought that we would see a big sell off before the cliff. Looks like we will see a late 'Santa Claus rally'.
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