New Year Starts with Cliff Deal! Futures Show Strong Green
Futures are following global markets higher after the House of Representatives passed the Senate approved legislation to avert the fiscal cliff. Of course, the attention at some point will revert to the looming debt ceiling debate, but the deal coupled with fresh money flowing into equities in the New Year is lifting market sentiment. A few key economic data points are on the table in today’s session, with the December Employment Situation looming large this Friday. From an economics perspective, I am concerned that the fiscal cliff debate and subsequent debt ceiling talk will severely hamper 4Q12 & 1Q13 economic growth. For the first session of 2013, futures for the Dow Jones Industrial Average jumped 192 points, or 1.5%, to 13,219. Those for the Standard & Poor’s 500 index rose 25.10, or 1.8%, to 1,445.20. Futures for the Nasdaq 100 index climbed 52 points, or 2%, to 2,707.25.
Wall Street rounded out a great year with gains on Monday, with equities advancing ahead of the fiscal cliff deal. The Dow Jones Industrial Average climbed 166 points, or 1.3%, to 13,104.14.The S&P 500 index added 23.76 points, or 1.7%, to 1,426.19, while the Nasdaq Composite climbed 59.20 points, or 2%, to 3,019.51.
The ISM Manufacturing Index: The Institute for Supply Management surveys more than 300 manufacturing firms on employment, production, new orders, supplier deliveries, and inventories. The measure accounts for roughly 20 percent of economic activity. The index gives a great look at the state of manufacturing and the direction it is heading, helping boost exports and domestic activity. The consensus figure is 50.5 for the month of December, after slipping to 49.5 from 51.7 in October. The range goes as low as 49.3 and up to 52.0.
Construction Spending: The report measures the value of new construction activity on residential, non-residential, and public projects, giving a great indication of the economy’s momentum. Construction and housing is all a factor of unemployment, and is one of the best multipliers out there for getting the most added benefit for each dollar spent. The consensus is for a 0.6 percent gain in November after jumping 1.4 percent in October, following a gain of 0.5 percent the month before. The consensus range is 0.0% to 1.0%.