Top Stories Last Week
- Equity Markets Continued to Slump on Uncertainties on Fiscal Cliff, Global Economies and Middle East Tension
Equity markets recovered on Friday from three-month lows on some hopes about fiscal cliff, but fell for the week amid Middle East tension and growing concern on global economic growth. Standard & Poor’s 500 Index was down 3.7%, MSCI EAFE index lost 3.0% and MSCI emerging market index declined by 2.8%. Gold bucked the trend, up by 2.0% while the GSCI commodity index rallied 1.3%. In the bond markets, Barclays US Treasury index gained 1.3% while US high yield bond lost 1.6%.
- Middle East Tension between Israel and Hamas Escalated
Hama fired thousands of rockets into Israel. The Israeli military pressed ahead with its aggressive offensive intercepting at least two rockets fired toward Tel Aviv with the country’s new `Iron Dome’ missile defense system. Thousands of Israeli troops are massed near the Gaza border, meanwhile, awaiting an order to invade should Israeli leaders decide to widen the operation.
- Obama and Congressional Leaders Agreed to A Fast-Paced Negotiation on Fiscal Cliff
Congressional leaders said they agreed to a fast-paced talk to reach a deal that would avoid $500 billion in spending cuts and tax increases known as fiscal cliff. Calling the meeting in the White House “constructive”, they said both parties to make concessions.
- US Retail Sales Drop 0.3% in October
US consumers cut back on spending in October, an indication that some remain cautious about the economic outlook. Hurricane Sandy also depressed car sales and slowed business in the Northeast. The retail sales dropped 0.3% after three months of gains. Auto sales fell 1.5%, the most in more than a year. Excluding the volatile categories of autos, gas and building materials, sales fell 0.1%. That followed a 0.9% gain in September for that category. Online and catalog purchases fell 1.8%, the most in a year. Electronics and clothing stores also posted lower sales.
- Eurozone Finance Ministers Meeting
A meeting of euro zone finance ministers on Monday refused to make a decision on providing the debt-riden Greek state with a further installment of 31.5 billion euros from the previously agreed bailout. European Union head Jean-Claude Juncker announced that “no definitive decision” would be made at the meeting, despite the passage in the Greek parliament Sunday of a new 13.5 billion euro austerity package. Whilst the European Commission welcomed the new austerity measures, they will still need to analyze in detail the final version of the bill before any further loans are made available to Greece.
- Greek Lawmakers Approved 2013 Austerity Budget
Greek lawmakers approved the country’s 2013 austerity budget early Monday, an essential step in Greece’s efforts to persuade its international creditors to unblock a vital rescue loan installment without which the country will go bankrupt. More Earnings Reports
Top Stories to Watch This Week
- US Housing Markets
October existing home sales are expected to hold steady at 4.75 million pace; Housing starts in October are expected to be at a pace of 879K.
- Bank of Japan Meeting
Bank of Japan will keep interest rate unchanged at 0.1% according to economists’ consensus.