Friends
Well, Congress and The White House finally agreed to a solution that solves the fiscal cliff by raising revenues on the rich (hey they don’t need the money anyway) and slashing spending on social programs which will help us finally achieve a balanced budget. Excuse me, if you could just hold on for a moment I’m getting some more information. What’s that, they forgot the spending part? They actually added $4 Trillion to the deficit over the next 10 years? Oh well, at least they passed a bill, right?
Anyway, traders seemed to be relieved that at least something got done. Yes, it simply sets up a fight a couple of months from now, but for the time being, the “cliff” seems to have been averted. Stocks rose more than 200 points as measured by the Dow right at the open, and held the gains for the entire session. For the day, the Dow Jones Industrial Average was up 308 points to close at 13,412. The S&P 500 was up 36 points to finish the day at 1462. Gold rallied $10 to trade at $1685 per ounce, while oil was up $1.12 to trade at $92.94 per barrel WTI.
Today simply caught the bears on the wrong side of the trade (not totally illogical betting against Congress), as most everything was up in price. The bulls would like to see the gains hold and preferably see the market continue higher for the next few sessions to indicate that there might be more here than just short covering by the bears.
Maybe we can get away from politics for a few weeks anyway, as we will be monitoring the employment report Friday, and next week will kick off earnings season. We’ll keep you informed as the New Year unfolds.
Have a nice evening everyone.
