Still positive on Wall Street!
by Peter Switzer
The courage of US investors has been sustained with another positive day for Wall Street with fiscal cliff anxiety swamped by better news elsewhere.
The Dow was up 82.71 points or 0.64 per cent to 13,034.49 while the S&P 500 gained 2.23 points or 0.16 per cent to end at 1409.28.
Helping the Dow was President Barack Obama’s comments that a deal could be struck within a week, and that was to the Business Roundtable he hosted.
The sticking point is how the wealthiest Americans will be taxed. Obama wants to take the Bush tax cuts off the top two per cent of income earners but these are dyed-in-the-wool Republican supporters.
There are still concerns over the cliff challenges but the majority of those who determine market direction are betting that a solution happens. Helping positivity was another good day for European shares and a speech from China’s new leader, Xi Jinping, who made it clear that his country was still going to be a powerhouse for world economic growth.
Meanwhile, the Yanks got another piece of good economic news, confirming the steady recovery, with factory orders up in October against expectations. This rosier outcome for the economy was added to by the the Institute for Supply Management's services sector index which rose to 54.7. This also was better than expected. Interestingly, US productivity came in at the best result for two years.
And ahead of tomorrow’s jobs report, a private sector survey came in under expectations with 118,000 jobs created instead of the predicted 125,000. However, the ADP survey is not always a good indicator for the official jobs numbers.
Locally, following yesterday’s GDP reading, which showed we are now growing at a slow two per cent annualised rate, today’s unemployment number could have a big bearing on what the Reserve Bank does with interest rates in the New Year.
Watch this space!
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Published on: Thursday, December 06, 2012
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