December 31, 2012
(This is Mark Vickery substituting for Sheraz Mian while he
Say goodbye to 2012 -- an occasionally volatile but modestly
successful 12 months overall, even if Congress' apparent
impotence in the face of the coming Fiscal Cliff has hacked away
at that perception over the past couple weeks. The housing market
has predictably gained traction, businesses are still sitting on
giant mounds of cash and financial institutions look to be on
much firmer ground.
That said, Friday's Dow fell 158 points, the 5th down day in a
row, and markets were lower across the board. The VIX volatility
index has spiked and fear gauge has been rising since word was
announced that the congressional compromise to keep from going
over the fiscal cliff was likely to fail.
Developments over the weekend and early today seem to indicate
Congress' willingness to come to a patchwork, kick-the-can deal
at some point this week. Call it building a long diving board
over the edge of the cliff. Surprised?
So let's not belabor such matters on this holiday-shortened
trading day. We're seeing futures roughly flat in the pre-market
-- a vast improvement from they were just a short time ago this
morning. Could it be that reports of staving off the cliff are
helping recover positive sentiment? Or are investors merely
locking in some attractive buys in the wake of our holiday season
Friday's good news was clearly eclipsed by Fiscal Cliff fears,
so perhaps we should take a second look. The Chicago PMI reached
51.6% in December, the best performance in 4 months, and higher
than the 51.0% expected. Its most negative number was employment,
which fell from 55.2 to 45.9, likely on fears about the fiscal
Also, Pending Homes Sales from the National Association of
Realtors is now up for 3 months in a row, to their highest level
in over 2 1/2 years. This helps bolster the positive story
regarding the housing market, which is expected to continue
improving in 2013.
We here at Zacks wish you all a happy and healthy 2013, as
well as tremendous success in your investment endeavors. See you
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