My post on December 1st was titled ‘Fiscal Cliff Progress is Typical of Successful Negotiations So Far'. In it I described how successful business negotiations usually play out.
I noted how to outsiders it usually looks hopeless in the beginning, with both sides acting disgusted, protesting that the other side is being ridiculous and is obviously not serious about reaching an agreement. All that is accomplished is a grudging agreement to at least keep talking and meet again. Subsequent phone calls take place pointing out the positives of making a deal, and hints are made by both sides that maybe the initial offers were not realistic. At subsequent meetings both sides give ground grudgingly and eventually a deal is usually made that both sides feel is fair, or at least the best that could be achieved.
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It looks like the fiscal cliff talks have followed that typical pattern, the difference being that with politicians the initial posturing is carried out in public for political purposes.
But from the news reports this morning it's looking like that initial posturing stage has ended, and the talks are reaching toward the end game.
The Wall Street Journal is reporting this morning that:
"Budget negotiations between the White House and Republican House Speaker John Boehner have progressed steadily in recent days, people close to the process said. . . . . The people familiar with the matter say talks have taken a marked shift in recent days as staff and leaders have consulted, becoming more serious. . . . . . Perhaps the most encouraging sign to veterans of congressional negotiations is the fact that both sides maintained a strict public moratorium on commenting on the talks. One Republican said that in Congress, as in union negotiations, the most progress is made at the bargaining table when the parties are not speaking at microphones to the public,"
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And from Business Insiders:
"Fiscal cliff negotiations between Congressional leaders and the White House appear to have taken a new turn. In the latest development, both sides have agreed to a moratorium on pubic comments about the negotiations, a marked difference from the previous status quo in which most negotiating was being conducted strictly via public comments."
Let's hope the rest of my scenario plays out, that they will reach an agreement that avoids the fiscal cliff, or at least kicks it down the road to next summer.
Yesterday in the U.S. Market.
A quiet day on continuing nervousness over the fiscal cliff negotiations. The Dow traded in an intraday range of just 55 points from its high to its low, and closed up 14 points. Volume remained light at 0.6 billion shares traded on the NYSE.
The Dow closed up 14 points, or 0.1%. The S&P 500 closed unchanged. The NYSE Composite closed up 0.1%. The Nasdaq closed up 0.3%. The Nasdaq 100 closed up 0.3%. The Russell 2000 closed up 0.5%. The DJ Transportation Avg. closed up 1.1%. The DJ Utilities Avg closed unchanged.
Gold closed up $7 an ounce to $1,712.
Oil closed down $.21 a barrel at $85.56.
The U.S. dollar etf UUP closed down 0.1%.
The U.S. Treasury bond etf TLT closed up 0.4%.
Yesterday in European Markets.
European markets struggled yesterday with the news from Italy of Premier Monti's decision to retire. The London FTSE closed up 0.1%. The German DAX closed up 0.2%. France's CAC closed up 0.2%. Greece closed up 1.4%. Ireland closed down 0.4%. Italy closed down 2.2%. Spain closed down 0.6%. Russia closed up 1.0%.
Asian Markets were mixed Sunday night and again last night.
The Asia Dow closed up very fractionally Sunday night, 0.1%, and 0.15% last night.
Among individual markets last night:
Australia closed up 0.4%. China closed down 0.4%. Hong Kong closed up 0.2%. India closed down 0.1%. Indonesia closed up 0.4%. Japan closed down 0.1%. Malaysia closed up 0.4%. New Zealand closed down 0.1%. South Korea closed up 0.4%. Singapore closed up 0.1%. Taiwan closed up 0.1%. Thailand closed up 0.5%.
Markets This Morning:
European markets are up this morning. The London FTSE is up 0.1%. The German DAX is up 0.6%. France's CAC is up 0.8%. Spain is up 0.1%. Greece is up 1.2%. Italy is up 0.8%.
Oil is up $.18 a barrel at $85.74.
Gold is down $6 an ounce at $1,708.
This Morning in the U.S. Market:
This week will be a light week for potential market-moving economic reports, but they will include some of significant importance, including the Fed's FOMC meeting and its decisions, the U.S. Trade Deficit, Retail Sales, Consumer Price Index, etc. To see the full list click here, and look at the left side of the page it takes you to.
There were no reports yesterday.
This morning's reports are that the NFIB Small Business Optimism Index fell sharply in November, from 93.1 to 87.5. The survey showed 49% of small-business owners expect future business conditions to be worse than current conditions. And the U.S. Trade Deficit was up 4.9% in October to $42.2 billion, about in line with the consensus forecast.