NYSE shares rise after Speaker of the House John Boehner said there have been constructive talks about controlling the budget deficit. Boehner went on to say that the dialogue with President Obama, lead to agreement that they would accept government revenue increase as well as spending cuts. The Standard & Poor’s 500 Index rose 0.5 percent to 1,359.88. The Dow Jones went up .4% to 12,588.31. This is a gain of 45.93 points, bringing its weekly low to 1.8%. This is the longest losing strike since Aug. 2011 running on its fourth straight week of losses. Today the quantity exchange-listed, which was 7.4 billion shares, was 22% higher than the previous 3 month daily average.
For the third day in a row German stocks fell. The DAX has hit its lowest point in more than 2 months. This happened as US President Obama met with Congress to come up with a solution for the fiscal cliff and the situation that has escalated in Israel.
The DAX slid 1.3 percent to 6,950.53;This is the lowest it has traded since Sept. 4th, during the close of trading in Frankfurt. It closed at a weekly lose of 3%. The equity benchmark has fallen 5.8% since President Barack Obama was reelected into office on Nov. 6th. Speculators’ attention is focused on looming “fiscal cliff” that will set into motion automatic budget cuts and tax increase that will total $607 billion, unless Congress can come up with a solution. The broader HDAX Index lost 1.3 percent today.
Stocks in Asia, outside of Japan, fell this week as companies warned of slower than expected earnings growth. Shares in Japan rise in wake of this month’s coming elections. Mitsubishi UFJ Financial Group Inc., Japan’s biggest bank, rose 3.1 percent in Tokyo on the perception that the upcoming elections will put in power an opposition party that advocates aggressive monetary easing.
The MSCI Asia Pacific Excluding Japan Index fell 1 .2% this week, trimming to 10 percent the gauge’s gain through yesterday from this year’s low on June 4 as central banks added stimulus to spur economic growth and data showed a slowdown in China may be ending. Australia’s S&P/ASX decreased 2.8 percent this week. South Korea’s Kospi Index dropped 2.3 percent. The Taiwanese Taiex Index sank 2.2%, Hong Kong’s Hang Seng Index dropped 1.1% percent.
The US dollar rose against the euro. This was a reaction to Congress member meeting with President Obama about reducing the budget deficit. At the beginning of next year there will be a series of increases in taxes and spending cuts in the government, if Congress can’t manage to come up with a deal. Currently the dollar is being seen as a safe haven currency and historically has the tendency to rise when investors are anxious about the economy.
After the latest Quarterly Inflation report from the BoE, the pound settled the week lower. The reports had dampened the trader’s interest in the Sterling. The ONS released a jobs report about UK. The stats show that the number of people claiming unemployment benefits rose by 10,000 in the previous month. This is the biggest increase since 2011, which came after the Olympics brought a boom of jobs that eventually faded away.
The BoE brought some structure to the fragile nature of the economic recovery by the release of the Quarterly Inflation report which showed that the MPC see ‘material risk’ that growth may be slower for a longer period of time, and that new macro forecasts reveal that any further stimulus is unlikely to take place soon.
The dollar was practically unchanged at 81.22 Japanese yen from 81.21 yen. The dollar is up 2.2 percent against the yen for the week due to political turmoil in Japan. Japanese Prime Minister Yoshihiko Noda dissolved the lower house of parliament Friday. Elections are set for Dec. 16. If Noda’s party loses, the country will get its seventh prime minister in six and a half years.
The price of gold was steady this Friday as traders saw the asset as oversold and picked up nicely prices positions. This sent gold into positive territory for a brief period. Speculators purchased dollars as they are worried about the looming fiscal cliff, which is a set of taxes and budget cuts that will disrupt the US economy. On the Comex gold futures were down 0.03% at 1,713.35 a troy ounce. In the beginning gold gained amongst a somewhat bearish session thanks to the doubt about the surrounding fiscal cliff.
rose with the worries about the war between Israel and Hamas becoming a wider conflict across the Middle East effecting crude shipments. Jerusalem and Tel Aviv both sounded air-raid alarms as Palestinian missiles landed near those areas. Israel is beginning its retaliation bombings of Gaza Strip and has plans to initiate its military draft.
Today’s economic data showed investors that the industrial production has hit an unexpected drop in October because of the power outages in the Northeast due to Super Storm Sandy.