The market is lower again in early trading after Senator Harry Reid says it is unlikely they will get something done to avoid the fiscal cliff before year end. Stocks ticked lower on this headline, despite the President making calls to all 4 key Congressional leaders to try to get updates.
In addition to the fiscal cliff talks, under the radar is the fact that Treasury Sec Geithner said the country's debt limit will again be hit by December 31st. They sure didn't buy themselves much time last August when they raised the debt ceiling. Dumb.
In economic news, the latest consumer confidence number for December ticked lower to 65.1 from last month's reading of 71.5. November new home sales hit 377,000 which was below expectations but higher than the previous month's 361,000.
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Asian markets were mostly higher overnight, led again by Japan which continues to talk about more serious stimulus measures. This time they are even talking about buying foreign assets. China lagged and finished -0.6% lower. The S. Korean finance minister cut their growth forecast for 2013 from 4.0% to 3.0%.
Europe's markets are mixed this morning. Germany's finance minister said the country's economy will expand at a "decent" pace next year.
The dollars is flattish this morning, as our most commodities. Oil prices are flat near $90.90 and gold prices are near $1660. Silver and copper prices are getting a little more of a bounce today.
The 10-year yield is fading back to 1.71%. And the volatility index is up another +4.5% near the 20.50 level, which it has not seen since July.
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Trading comment: The S&P 500 is slipping below its 50-day support right now, which sits near 1412. The Nasdaq is also below its 50-day today. The price action today has also erased the December gains in the market, and with 2-days left of trading for 2012 we could see traders look to lock in profits as hopes of avoiding the fiscal cliff fade. We have continued to counsel a cautious approach. We realize that even if we miss the 12/31 deadline and a deal is reached soon after, the market would likely rally on the positive news. But even a deal is likely to contain policies that are not going to stimulate the economy in the near-term and are more likely to dampen economic growth. As such, we want to remain conservative for the intermediate-term.