The cliff has to be beaten
by Peter Switzer
Good news on the US economy with economic growth up to 3.1 per cent from 2.7 per cent, but this had to cope with fiscal cliff talks, which are still stalled, and yet the stock market showed that the optimists have not got the jitters yet, though it could be close.
The next issue ahead is House Speaker John Boehner’s Plan B that will be voted on in Washington later today.
As I argue, optimists still outweigh pessimists with the Dow closing up 59.75 points or 0.45 per cent to 13,311.72 while the S&P 500 was 7.88 points or 0.55 per cent to 1443.69.
The crunch point for the Plan B is the fact that tax cuts for Americans with earnings up to $1 million would be extended, but if this gets through, President Barack Obama could use his veto option.
Experts think the stalemate continues until the weekend when Obama and Boehner would haggle it out. I hope they’re right or else there could be a negative Christmas Eve session if uncertainty is ramped up by failed talks over the weekend.
Away from cliff crap, US sales of existing homes spiked 5.9 per cent in November, which is another great sign for the US economic recovery that Obama and Boehner would be mad to ruin by screwing up their negotiations.
I firmly believe that with the US showing such positive economic omens and China avoiding a hard landing with growth looking to be better than Doomsday merchants were predicting, that 2013 could be a ripper for stocks.
However, the year can’t start with the US going over the cliff — it just can’t and that’s why the fiscal cliff has to be beaten.
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Published on: Friday, December 21, 2012
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