“Sitting around, watching Congress discuss the Fiscal Cliff all week is getting fun”
The Dow Jones Industrial Average inched up 0.12% this week and is 6.6% positive year to date. The S&P 500 also rose 0.5% this week and remains up 12.6% in 2012.
Links Worth Snacking On:
- Chart of the Week – What Facebook (& other start-ups) have done to San Fran rents
- Business Insider – How genius investor Jeff Gundlach’s brilliant idea helped the FBI find his stolen art collection
- Bloomberg – How much of the $65 billion spent is a wasted gift? The behavioral economics of holiday shopping
- WSJ – Think working late nights for an NYC bank is tough? Try doing it for a Hungarian one in Budapest
- HITC Business – The most difficult interview questions you’ll see on Wall Street
- Blog Maverick – What Mark Cuban really thinks about Facebook stock
Fan of Disney’s ’98 made-for-TV gem My Date with the President’s Daughter? Then you’ll love the DC-influenced financial news this week. Along with some positive GDP data and solid Black Friday/Cyber Monday spending numbers, political squabbling over the Fiscal Cliff was the major market mover – it pulled stocks down the first 2 days of the week, then optimism that Congress will cut a deal yanked ‘em back up for the next 3 and markets were up a hair for the week overall.
Fiscal Cliff
He said, she said. The big headline as of late has been how Congress needs to come up with a bipartisan budget by Jan. 1, or this great nation is going full speed off the Fiscal Cliff (an automatic combo of major government spending cuts & tax increases). Since the “Cliff” will likely hurt economic growth, the market is sensitive to every word coming off Capitol Hill.
The point of contention is raising taxes on the wealthy – Reps are against it and Dems demand it. First, Republican Congressman John Boehner said things aren’t looking good, then Democratic Senator Chuck Schumer claimed talks are going swimmingly. Senate Majority leader Harry Reid thought there was little progress, but President Obama was optimistic that negotiations are productive. The Real Housewives style non-stop back-and-forth whipped investors all over the place (also like a Real Housewife).
Black Friday sales numbers
Despite providing the world with some instant YouTube classics, Black Friday didn’t boost stocks Monday. In 2011, sales on America’s binge shopping holiday grew 16% from the previous year – so this year’s 13% growth disappointed, which quickly hit Wal-Mart, Target, and Macy’s stock. For the growing number of sweatpants-clad/home-bound shoppers, online sales spiked 32% on Black Friday and continued straight through Cyber Monday, pumping up shares of eBay and Amazon.com.
Corporate News
Facebook declared its “open relationship” with online gaming partner Zynga. No longer will Zynga have exclusive rights to make online games on the social network, and analysts figured the increased competition from Silicon Valley should lower rates it needs to pay Zynga and increase Facebook profits. The Book rose 2.3% Friday to end a November of 32% stock growth. It’s best stock month since its flaw-full May IPO.
Q3 GDP
All our La-Z-Boy, nachos, and instant-beer-chiller investments for the beginning of the NFL season in September must have paid off: US Gross Domestic Product (GDP) rose 2.7% in the 3rd quarter – the measurement of economic output is a big improvement from the government’s initial estimate of 2% growth, last quarter’s 1.3% growth, and the 1st quarter’s 1.7% growth. The number shows the economy’s improving, but still very much in recovery phase. As for the upcoming 4th quarter, analysts are wondering how much business activity Hurricane Sandy washed away…
EU Debt Crisis
In Europe leaders agreed to forgive Greece of approximately 20% of its debt load by extending the due-dates of bailout loans, cutting interest rates on its debt, and straight up forgiving other chunks of the country’s massive IOU collection. International lenders figured it’s not working continuing to give the broken country more and more loans they need to pay back, so Greece was given more time and more flexibility. Taxpayers of the lending countries like Germany and the Netherlands were pretty pissed, but their parliaments swallowed the difficult pill and passed the newest measures to prevent a near term Greek bankruptcy.
This Week:
- Monday – ISM November Manufacturing Survey, November Vehicle Sales
- Tuesday – Earnings: Pandora, AutoZone, Toll Brothers, Vail Resorts…
- Wednesday – ADP Jobs Report, ISM November Non-Manufacturing Report
- Thursday – Weekly Jobless Claims
- Friday – (the big) November Non-Farm Government Payrolls Report, Reuters/University of Michigan Consumer Sentiment Report
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