Daily Market Update – December 26, 2012

Top News Highlights

Some lawmakers voiced concern on Dec 23 that the country would go over the "fiscal cliff" in nine days, triggering harsh spending cuts and tax hikes, and some Republicans charged that was President Barack Obama's goal. "It's the first time that I feel it's more likely that we will go over the cliff than not," Senator Joe Lieberman, said. "If we allow that to happen it will be the most colossal consequential act of congressional irresponsibility in a long time, maybe ever in American history." "It looks like to me that obviously this is going to drag on into next year, which is going to hurt our economy," Republican Senator Bob Corker of Tennessee said. The Democratic president and Republican House of Representatives Speaker John Boehner, the two key negotiators, are not talking and are out of town for the Christmas holidays. Congress is in recess, and will have only a few days next week to act before Jan 1

Economic Highlights

Consumer sentiment in the U.S. deteriorated by even more than previously estimated in the Dec, according to a report released by Thomson Reuters and the University of Michigan. The report showed that the consumer sentiment index was downwardly revised to a reading of 72.9 from the preliminary reading of 74.5. The downward revision came as a surprise to economists, who had expected the index to be upwardly revised to a reading of 75.0
Germany's exports are likely to grow 4% in 2013, the German Chambers of Industry and Commerce, DIHK said. However, overall economic growth is slowing, with the rate below the 10-year average of 6%, DIHK economist Volker Treier said. According to a survey published by market research group GfK, export-oriented companies face the risk of lower demand as many economies in the Euro-zone slipped into recession. Nonetheless, these losses could be offset through better businesses with Asia and the U.S
Confidence among Japan's small scale businesses improved for the first time in nine months in Dec, data released by the Shoko Chukin Bank showed. The small business confidence index increased to 43.8 in Dec from 43.3 in Nov. The index increased for the first time since Mar. Japanese manufacturers were slightly more upbeat about their businesses in Dec, with the relevant sub-index rising to 40.7 from Nov's reading of 40.3