Markets Non-Committal as Fiscal Cliff Nears (Bloomberg)
With President Obama and Congress running out of time to act against the fiscal cliff, global markets seem bound and determined not to react too strongly. In the Far East, both Japan’s Nikkei 225 and the Shanghai Composite are up, .7% and 1.73%, respectively, while Hong Kong’s Hang Seng is down .04%. In Europe, the FTSE 100 and Germany’s DAX are down slightly, .27% and .57%, respectively, while France’s CAC 40 is up .72%. The only real consensus in market direction is in the American market index futures, where the Dow Jones, S&P 500 and Nasdaq are all down slightly. Wednesday’s market responses should be interesting.
Experts Warn Against Asian Stock Flu in 2013 (CNBC)
Include Far East investors among the winners for 2012. The Nikkei and Hang Seng both are up almost 23% for the year. Australia tails the duo slightly, up 15% in 2012. Smaller countries in the region faired even better, led by Thailand showing a 36% gain for the year and the Philippine Stock Exchange rising 33%. However, analysts now are warning that 2013 may not build on that momentum, especially if the United States freezes in the headlights and does nothing about the fiscal cliff. Ultimately, American consumers with less money in their paychecks from additional taxes could lead to a stalled economy or, worse, a recession, which would have a significantly negative impact on global markets.
China’s Manufacturing Output Climbs to 19-Month High (TheGlobe&Mail)
The world’s second-largest economy continues to whisper sweet nothings into the ears of investors who will listen, according to HSBC. For the fourth month in a row, the British banking behemoth’s purchasing managers index (PMI) rating was above 50, coming in at 51.5, indicating that China’s manufacturing sector is still expanding. In fact, manufacturing activity hit a 19-month high in December. Investor optimism appears to be gaining strength. In addition to the manufacturing sector, growth also has been seen in broader industrial production and retail sales. Is China the one market immune to any U.S. fiscal cliff diving? We shall see.