Daily Market Update – December 28, 2012

Top News Highlights

Senate Majority Leader Harry Reid said the U.S. budget dispute probably won't be resolved before Jan 1 because Republicans won't cooperate. "I don't know time-wise how it can happen now," Reid, said. He blamed House Speaker John Boehner and Senate Minority Leader Mitch McConnell, both Republicans. "Democrats can't put together a plan on their own because without participation of Leader McConnell and Speaker Boehner nothing can happen on the fiscal cliff. And so far, they are radio silent," he said. The two sides are locked in a stalemate as they try to prevent more than $600B in tax increases and spending cuts for 2013 scheduled to start taking effect in Jan

Economic Highlights

Consumer confidence in the U.S. held near a four-year high last week as Americans grew less pessimistic about the economy. The Bloomberg Consumer Comfort Index was little changed at minus 32.1 in the period ended Dec 23 from minus 31.9 in the prior week, a drop that was within the margin of error of 3 percentage points. The gauge was less than a point from an Apr reading that was the highest since Mar 2008
Russia's service sector growth eased to a three-month low in Dec, survey published by Markit Economics revealed. The seasonally adjusted HSBC business activity index, designed to track changes in total services activity, fell to 56.1 in Dec from 57.1 in Nov. The index remained above the 50 no-change threshold for the twenty-eighth month in succession in Dec. Although, the reading indicated a sharp overall expansion, this pointed to the weakest growth rate in three months
China's foreign trade is likely to hit a growth rate of around 6% this year, Commerce Minister Chen Deming was quoted as saying by Xinhua news agency. This was much below the official growth target of 10%. According to customs data, exports rose 2.9% Y-o-Y in Nov and imports recorded zero growth. Chen also noted that the country's foreign direct investment will likely total $110B this year. Outbound direct investment by non-financial institutions will reach $70B in 2012, the minister was quoted as saying