Dow soared 244, advancers over decliners 8-1 & NAZ rose 72. The Financial Index shot up almost 5 to the 225s, a yearly high. The MLP index exploded, up 13 to the 398s (one of its best gains in history), & the REIT index jumped 4 to 272 (4 below its yearly high). Junk bond funds are flying & Treasuries sank as risk worries decreased. Oil jumped by over
a dollar, to above $93, after US lawmakers
passed legislation to avoid a fiscal cliff. Gold reached a 2 week high as commodities gained on budget settlement.
Photo: Bloomberg
The House passed a bill undoing income tax increases for more than 99% of households, giving a victory to the pres even as Reps vowed to fight him in coming weeks for spending cuts in exchange for raising the debt ceiling. The 257-167 vote capped a tension-filled final push as Reps balked at a bipartisan Senate bill. “The deficit needs to be reduced in a way that’s balanced,” Obama said & added top earners & corps should pay even more & that Congress must raise the debt ceiling. “Everyone pays their fair share. Everyone does their part,” he said. The final days of drama surrounding the fiscal cliff of scheduled tax increases & spending cuts illustrated the partisan struggle that has made budget policy unpredictable & prone to crises as deadlines approach. Reps immediately turned to their next battle, a bid to raise the $16.4T debt ceiling to force cuts in entitlement programs such as Medicare. Congress must act as early as mid-Feb to prevent a default & the dispute may reprise a similar 2011 episode that led to a downgrade of the US credit rating. “Without meaningful reform of entitlements, real spending controls, and a fairer, cleaner tax code, our debt will continue to grow, and our economy will continue to stumble,” Boehner said. Obama said he’s “very open to compromise.” Medicare spending can be reduced, he said, yet “we can’t simply cut our way to prosperity.” Once again, solve today's problems today & tomorrow will take care of itself.
Bipartisan House Backs Tax Deal Vote as Next Fight Looms
Photo: Bloomberg
US manufacturing grew slowly last month after shrinking in Nov & hiring increased, suggesting the economy entered the new year with some momentum. The Institute for Supply Management said that its index of manufacturing activity rose to 50.7 in Dec from 49.5 in the previous month. The Nov reading was the lowest reading since Jul 2009, one month after the recession ended. A reading above 50 signals expansion. A measure of employment rose to the highest level in 3 months, suggesting that factories are adding jobs. There have been some positive signs for factory output. In Nov, companies substantially increased orders for a category of large equipment that reflects their investment plans following a big increase in the same category in Oct.
Spending on US construction projects unexpectedly dropped in Nov, restrained by declines in non-residential building & public works. Outlays fell 0.3% to an $866B annual rate after increasing a less-than-previously estimated 0.7% in Oct, according to the Commerce Dept. The forecast called for a 0.6% increase. But housing climbed to the highest level in more than 4 years. Construction spending increased 9.2% in the 12 months ended in Nov. Private construction spending fell 0.2% from the prior month. Homebuilding outlays increased 0.4% to a $295B annual rate, the most since Nov 2008. Private non- residential projects decreased by 0.7%, reflecting declines in the building of factories, power plants & educational facilities.
Construction Spending in U.S. Unexpectedly Fell in November
Stocks are having one of their best days in a long time. The new legislation signed one day AFTER the last minute will prevent the economy from shutting down & other problems will evaporate. However I don't think so. Little notice was paid to raising Social Security taxes which will affect every worker. The employee tax rate increases to 6.2% on the first $113.7K of wages. That will pinch consumer spending after the first paycheck for 2013 is received. Essentially nothing was done about out of control spending other than "trying harder" to control it in the future. Then there is the need to raise the debt ceiling limit SOON. That promises to be an VERY UGLY FIGHT. Just ask any Rep. But buyers today are unconcerned about any of these problems.
AMJ (Alerian MLP Index tracking fund)
| CLG13.NYM | ...Crude Oil Feb 13 | ...93.55 | .... 1.73 | (1.9%) |
| GCF13.CMX | ...Gold Jan 13 | ......1,693.80 | ... 19.00 | (1.1%) |
Photo: Bloomberg
The House passed a bill undoing income tax increases for more than 99% of households, giving a victory to the pres even as Reps vowed to fight him in coming weeks for spending cuts in exchange for raising the debt ceiling. The 257-167 vote capped a tension-filled final push as Reps balked at a bipartisan Senate bill. “The deficit needs to be reduced in a way that’s balanced,” Obama said & added top earners & corps should pay even more & that Congress must raise the debt ceiling. “Everyone pays their fair share. Everyone does their part,” he said. The final days of drama surrounding the fiscal cliff of scheduled tax increases & spending cuts illustrated the partisan struggle that has made budget policy unpredictable & prone to crises as deadlines approach. Reps immediately turned to their next battle, a bid to raise the $16.4T debt ceiling to force cuts in entitlement programs such as Medicare. Congress must act as early as mid-Feb to prevent a default & the dispute may reprise a similar 2011 episode that led to a downgrade of the US credit rating. “Without meaningful reform of entitlements, real spending controls, and a fairer, cleaner tax code, our debt will continue to grow, and our economy will continue to stumble,” Boehner said. Obama said he’s “very open to compromise.” Medicare spending can be reduced, he said, yet “we can’t simply cut our way to prosperity.” Once again, solve today's problems today & tomorrow will take care of itself.
Bipartisan House Backs Tax Deal Vote as Next Fight Looms
Photo: Bloomberg
US manufacturing grew slowly last month after shrinking in Nov & hiring increased, suggesting the economy entered the new year with some momentum. The Institute for Supply Management said that its index of manufacturing activity rose to 50.7 in Dec from 49.5 in the previous month. The Nov reading was the lowest reading since Jul 2009, one month after the recession ended. A reading above 50 signals expansion. A measure of employment rose to the highest level in 3 months, suggesting that factories are adding jobs. There have been some positive signs for factory output. In Nov, companies substantially increased orders for a category of large equipment that reflects their investment plans following a big increase in the same category in Oct.
Spending on US construction projects unexpectedly dropped in Nov, restrained by declines in non-residential building & public works. Outlays fell 0.3% to an $866B annual rate after increasing a less-than-previously estimated 0.7% in Oct, according to the Commerce Dept. The forecast called for a 0.6% increase. But housing climbed to the highest level in more than 4 years. Construction spending increased 9.2% in the 12 months ended in Nov. Private construction spending fell 0.2% from the prior month. Homebuilding outlays increased 0.4% to a $295B annual rate, the most since Nov 2008. Private non- residential projects decreased by 0.7%, reflecting declines in the building of factories, power plants & educational facilities.
Construction Spending in U.S. Unexpectedly Fell in November
Stocks are having one of their best days in a long time. The new legislation signed one day AFTER the last minute will prevent the economy from shutting down & other problems will evaporate. However I don't think so. Little notice was paid to raising Social Security taxes which will affect every worker. The employee tax rate increases to 6.2% on the first $113.7K of wages. That will pinch consumer spending after the first paycheck for 2013 is received. Essentially nothing was done about out of control spending other than "trying harder" to control it in the future. Then there is the need to raise the debt ceiling limit SOON. That promises to be an VERY UGLY FIGHT. Just ask any Rep. But buyers today are unconcerned about any of these problems.
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