Dow jumped 308 (surging to its highs in the closing minutes), advancers over decliners 6-1 (mild under the circumstances) & NAZ jumped 92. The Financial Index rose 6+ to the 227s, a new yearly high. Banks sighed a sense of relief after all was said & done yesterday. The MLP index vaulted 14+ to the 399s (the biggest gain in history) & the REIT index went up 2+ to over 270. MLPs were relieved new tax laws did not bother with them. Junk bond funds were higher & Treasuries sold off as stocks gained. Oil rose to a 3 month high, although it pulled back below 93 in the PM. Gold went up a relatively mild 12 on bets against more stimulus from the new legislation.
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
Manufacturing picked up in Dec, reflecting growth in orders, employment & exports that suggest the US expansion will be sustained in 2013. The ISM manufacturing index climbed to 50.7 from a 3-year low of 49.5 in Nov. Other data showed fewer outlays for non-residential projects pushed down construction spending in Nov for the first time in 8 months. A rebound in housing & stabilization in global growth point to a pickup in sales that will boost companies. Stocks had the biggest 2-day rally in 13 months as Congress passed a bill postponing spending cuts & tax increases. Homebuilding outlays increased 0.4% in Nov to a $295B annual rate, the most in 4 years, a report from the Commerce Department showed. But the pickup failed to offset declines in non-residential building & public works as total construction spending fell 0.3% in Nov after a 0.7% gain. This is how the bulls see it & propelled stock buying today.
Photo: Yahoo
While the new tax package will protect 99% of Americans from an income tax increase, most of them will still end up paying more federal taxes in 2013. That's because the legislation did not prevent a temporary reduction in the Social Security payroll tax from expiring. In 2012, that 2-percentage-point cut in the payroll tax was worth about $1K to a worker making $50K a year. The Tax Policy Center estimates that 77% of households will face higher federal taxes in 2013 under the new agreement. High-income families will feel the biggest tax increases, but many middle & low income families will pay higher taxes too. Households making $40K- $50K will face an average tax increase of $579 in 2013, according to the Tax Center. Households making $50K- $75K will face an average tax increase of $822. For most people, it will be just the payroll tax. The tax package extends most the Bush-era tax cuts for individuals making less than $400K & married couples making less than $450K. The income threshold covers more than 99% of all households according to the Tax Center. However, the increase in payroll taxes will hit nearly every wage earner. Social Security is financed by a 12.4% tax on wages up to $113.7K, with employers paying half & workers paying the other half. The share paid by workers was reduced from 6.2% to 4.2% for 2011 & 2012, saving a typical family about $1K a year.
Taxes rising for most people despite fiscal deal AP
Photo: Yahoo
House Speaker Boehner insisted on that he is committed to passing a Superstorm Sandy disaster aid bill this month after his decision to deny a vote on the package. The pres urged House Reps to pass the $60B measure on Wed before the current Congress ends at noon on Thurs & pending legislation expires. The Rep-controlled House adjourned late Tues without voting on the relief bill after it approved a the fiscal cliff budget deal. An aide to Boehner said the speaker would meet on Wed PM with Reps from New York & New Jersey, the states hardest hit by the storm. Boehner told the lawmakers he will make a Sandy relief bill his first priority in the new Congress, which will be sworn in on Thurs. Many Reps complained the Sandy aid bill was loaded with billions of dollars of pork, on projects unrelated to damage from the storm or long-term infrastructure improvements. Among expenditures criticized were $150M to rebuild fisheries, including those in the Gulf Coast & Alaska, & $2M to repair roof damage that pre-dates the storm on Smithsonian Institution buildings in Washington. By waiting until the new Congress convenes, the House would have more control over a fresh piece of legislation, & chances are greater that a smaller initial bill to handle immediate disaster needs would be passed, & sent to the Senate.
Stocks have had a spectacular 2 day rally this week as the pres basically got what he wanted in his new tax package. But markets are heavily overbought, bulls don't mind. Now that fiscal cliff issues have been decided, new events will drive the markets. First is the big monthly jobs report on Fri which will probably report a mediocre increase in jobs with the unemployment rate remaining at unsatisfactory levels. The new tax bill, which is not friendly towards small business owners who have been hiring many of the unemployment, may haunt this data in coming months. Next month Congress will have to get serious about raising the debt ceiling & that promises to be a very ugly fight, In Mar, budget cuts that were supposed to begin yesterday, will take effect. That won't be pretty. The outlook for stocks is not as rosy as this short rally suggests.
AMJ (Alerian MLP Index tracking fund)
| CLG13.NYM | ...Crude Oil Feb 13 | ....92.97 | ... 1.15 (1.3%) |
Manufacturing picked up in Dec, reflecting growth in orders, employment & exports that suggest the US expansion will be sustained in 2013. The ISM manufacturing index climbed to 50.7 from a 3-year low of 49.5 in Nov. Other data showed fewer outlays for non-residential projects pushed down construction spending in Nov for the first time in 8 months. A rebound in housing & stabilization in global growth point to a pickup in sales that will boost companies. Stocks had the biggest 2-day rally in 13 months as Congress passed a bill postponing spending cuts & tax increases. Homebuilding outlays increased 0.4% in Nov to a $295B annual rate, the most in 4 years, a report from the Commerce Department showed. But the pickup failed to offset declines in non-residential building & public works as total construction spending fell 0.3% in Nov after a 0.7% gain. This is how the bulls see it & propelled stock buying today.
Photo: Yahoo
While the new tax package will protect 99% of Americans from an income tax increase, most of them will still end up paying more federal taxes in 2013. That's because the legislation did not prevent a temporary reduction in the Social Security payroll tax from expiring. In 2012, that 2-percentage-point cut in the payroll tax was worth about $1K to a worker making $50K a year. The Tax Policy Center estimates that 77% of households will face higher federal taxes in 2013 under the new agreement. High-income families will feel the biggest tax increases, but many middle & low income families will pay higher taxes too. Households making $40K- $50K will face an average tax increase of $579 in 2013, according to the Tax Center. Households making $50K- $75K will face an average tax increase of $822. For most people, it will be just the payroll tax. The tax package extends most the Bush-era tax cuts for individuals making less than $400K & married couples making less than $450K. The income threshold covers more than 99% of all households according to the Tax Center. However, the increase in payroll taxes will hit nearly every wage earner. Social Security is financed by a 12.4% tax on wages up to $113.7K, with employers paying half & workers paying the other half. The share paid by workers was reduced from 6.2% to 4.2% for 2011 & 2012, saving a typical family about $1K a year.
Taxes rising for most people despite fiscal deal AP
Photo: Yahoo
House Speaker Boehner insisted on that he is committed to passing a Superstorm Sandy disaster aid bill this month after his decision to deny a vote on the package. The pres urged House Reps to pass the $60B measure on Wed before the current Congress ends at noon on Thurs & pending legislation expires. The Rep-controlled House adjourned late Tues without voting on the relief bill after it approved a the fiscal cliff budget deal. An aide to Boehner said the speaker would meet on Wed PM with Reps from New York & New Jersey, the states hardest hit by the storm. Boehner told the lawmakers he will make a Sandy relief bill his first priority in the new Congress, which will be sworn in on Thurs. Many Reps complained the Sandy aid bill was loaded with billions of dollars of pork, on projects unrelated to damage from the storm or long-term infrastructure improvements. Among expenditures criticized were $150M to rebuild fisheries, including those in the Gulf Coast & Alaska, & $2M to repair roof damage that pre-dates the storm on Smithsonian Institution buildings in Washington. By waiting until the new Congress convenes, the House would have more control over a fresh piece of legislation, & chances are greater that a smaller initial bill to handle immediate disaster needs would be passed, & sent to the Senate.
Stocks have had a spectacular 2 day rally this week as the pres basically got what he wanted in his new tax package. But markets are heavily overbought, bulls don't mind. Now that fiscal cliff issues have been decided, new events will drive the markets. First is the big monthly jobs report on Fri which will probably report a mediocre increase in jobs with the unemployment rate remaining at unsatisfactory levels. The new tax bill, which is not friendly towards small business owners who have been hiring many of the unemployment, may haunt this data in coming months. Next month Congress will have to get serious about raising the debt ceiling & that promises to be a very ugly fight, In Mar, budget cuts that were supposed to begin yesterday, will take effect. That won't be pretty. The outlook for stocks is not as rosy as this short rally suggests.
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