Top Stories Last Week
- US Stocks Declined on Concern about US Fiscal Cliff While Emerging Market Stocks Rallied
US stock markets dropped last week as the politicians in Washington could not reach a deal to avert fiscal cliff by the year end. However, the stocks in emerging market stocks continued their six-week winning streak as investors are getting more confident on the turnaround of the economies in EM countries. Standard & Poor’s 500 Index lost 1.9%, MSCI EAFE index was down 0.9% while MSCI emerging market index climbed 1.1%. Gold climbed by 0.1% and the GSCI commodity index gained 0.4%. In the bond markets, Barclays US Treasury index gained 0.5% while US high yield bond lost 0.2%.
- The US Congress Went Back to Work On Sunday Trying to Reach a Last-minute Deal
Congress went back to work on Sunday to face a combination of spending cuts and tax increases totaling $600 billion set to kick in on January 1. President Barack Obama is pressuring congressional Republicans to cut a last-minute deal. Both the House of Representatives and the Senate were back into session. But the congressional leaders hit some setbacks when Republicans insisted that changes to how Social Security benefits are adjusted for inflation be part of the deal.
- US Housing Recovery Continued
The widely-watched S&P/Case-Shiller home price index rose more-than-expected in October, increasing for the seventh consecutive month. It provided further evidence of continued US housing market recovery. The Index rose at an annualized rate of 4.3% in October on a year over year basis, above expectations for a 4% increase. In the previous moth U.S. home prices also climbed by an unrevised 3.0%.
Top Stories to Watch This Week
- Is US Going Over the Cliff ??
Automatic spending cuts and tax increases totaling $600 billion take effect if no deal is reached by the congress in Washington on Monday.
- US, China and Euro zone PMI Manufacturing Index
The US ISM Manufacturing Index is expected to edge up in December to an expansionary 50.2 from 49.5 in November.
The Chinese PMI is expected to continue showing expansion in December, however, in Euro zone, The PMI index is likely to show contraction of manufacturing activities in December.
- US Nonfarm Payrolls and Unemployment Rate
US Nonfarm payrolls are likely to seen rising by 150K in December, and the unemployment rate is expected to hold steady at 7.7%, according to economists’ forecasts.
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