Futures Edge Lower as Negotiations Stall…..Again

Morning Outlook

Wall Street will look to recover from the fiscal cliff induced decline in yesterday’s session. It seems that talks have stalled, and as quickly as sentiment turned positive earlier in the week, it has now turned negative. The economic calendar is packed, with our final look at GDP for the past quarter, which is kind of inconsequential as it is such a lagging indicator, alongside labor and housing data. There will be some work to do for a winning session, as futures are moving slightly lower. Futures on the Dow Jones Industrial Average fell 4 points, or less than 0.1%, to 13,215. S&P 500 Index futures lost 0.5 point to 1,432.60, while Nasdaq 100 futures rose 1.5 points to 2,694.50.

As stated earlier, major averages came off of two month highs with a solid decline Wednesday. The Dow Jones Industrial Average fell 98.99 points, or 0.7%, to 13,251.97. The S&P 500 Index lost 10.98 points, or 0.8%, to 1,435.81, with telecommunications hardest hit among its 10 industry sectors. The Nasdaq Composite Index declined10.17 points, or 0.3%, to 3,044.36.

Economic Calendar

8:30 AM
Quarter 3 Gross Domestic Product: GDP measures all the goods and services produced within the United States during the first quarter. The consensus for real GDP (taking inflation into account) in the quarter is for growth of 2.8%, up from the revised Q3 reading of 2.7% annualized and 1.3% increase in Q2. The range goes as low as 2.6% to 3.0%.

8:30 AM
Jobless Claims: New unemployment claims for the week of December 15th, to show the number of individuals who filed for unemployment insurance for the first time. The fewer people filing for unemployment benefits, the more have jobs, the more income in the consumer’s pocket, as well as a forecast on the strength of the economy. The consensus is for an increase to 359,000 for first time jobless claims from 343K. We have seen four consecutive weekly declines as we set out sites on the December Employment Situation. These holiday numbers always get funky, but it is what it is. The consensus range goes from 345K to 395K.

10:00 AM
Existing Home Sales: The number of previously constructed homes, condominium and co-ops in which a sale closed during the month. The consensus for November is a 4.90 million unit annual rate. Existing home sales in October bounced up 2.1 percent to a 4.79 million annual rate following a revised 2.9 percent decline in the prior month. Continuing to hold down sales is lack of supply, down from 5.6 months in September to 5.4 months for the lowest rate in 6-1/2 years. The number of homes on the market, at 2.14 million, is the lowest in 10 years. The range goes from 4.60M to 4.96M for the month.

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