S&P 500 Falls as President Obama Holds Ground on Taxes (Bloomberg)
U.S. stocks fell, sending the benchmark Standard & Poor’s 500 Index lower for a second straight day, after President Barack Obama held his ground about raising tax rates for the highest-income Americans. Obama said in a Bloomberg Television interview that the Republican offer on resolving the fiscal cliff doesn’t go far enough and won’t raise the revenue needed to shrink the deficit by $4 trillion over the next decade. Obama, in his first television interview since winning re-election, said, “We have the potential of getting a deal done.”
Investors ‘Should Get Used to 1-2% Growth’: Pimco’s Gross (CNBC)
Investors should get used to one to two percent economic growth for the foreseeable future, Pimco’s Bill Gross told CNBC’s “Street Signs” on Tuesday. Earlier Tuesday, Gross released his final investment letter for 2012, where he continued to warn about slower economic growth due to ongoing structural challenges such as high debt levels, a slower growing China and an aging workforce. “Growth has been challenged because much of the rest of the world has taken much of that growth from us in terms of job creation,” Gross said. “We need to have policies that basically fight back.”
Fed Officials Laud Stimulus, Quibble Over Future Plans (Reuters)
Central bankers appear satisfied with the impact of their latest monetary stimulus, though there is some disagreement over how forcefully to continue purchasing bonds, remarks by two top policymakers on Monday showed. Boston Federal Reserve Bank President Eric Rosengren, one of the most vocal proponents of Fed asset purchases, said there was a “strong case” for the Fed to stay the course on accommodative policies next year and continue buying a total of $85 billion in bonds each month.
However, James Bullard, president of the St. Louis Fed, argued the central bank should not replace its expiring ‘Operation Twist’ program on a dollar-for-dollar basis. He said purchases that expand the Fed’s $2.8 trillion balance sheet would have a bigger effect than Twist, which does not add to the balance sheet.