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“Progress” in fiscal cliff negotiations lifts US market | | | From: NetResearch Asia [[email protected]] Sent: Tuesday, December 18, 2012 8:54 AM To: NetResearch Asia 18 Dec 2012 Subject: “Progress” in fiscal cliff negotiations lifts US market Pre-Market Open Commentary for 18 December 2012 ( CO. REG. NO. 199904258C ) DJIA: 13235.39 +100.38 Nasdaq Composite: 3010.60 +39.26 Good morning, fellow investors US stocks surged on Monday, led by the financial and housing sectors, on rising hopes that a deal to the "fiscal cliff" negotiation in Washington is taking shape and could be reached in days. After weeks of political wrangling and negotiation stalemate between President Obama and Congress, House Speaker John Boehner edged closer to Mr Obama's position by proposing to extend lower tax rates for everyone who earns less than US$1 mil and offered to extend the debt limit for a year in order to reduce the deficit. Although his position is still far from that of President Obama, it provided positive signal to market that the a deal will ultimately be reached. Market was further underpinned by hopes for new stimulus measures in Japan, after an election win as prime minister over the weekend for Shinzo Abe who has promised monetary and fiscal stimulus to rescue the world's third largest economy from recession. Market surged higher despite a weaker than expected reading on the manufacturing conditions in the New York State as the index fell to -8.1 in December, from -5.2 in November. Further underpinning markets were gains in Apple share which edged higher by 1.8% to US$518.83, even though two firms cut their price targets on the stock on Monday citing weaker-than-expected sales of iPhones and iPads. The tech giant had announced sale of more than 2 mil new iPhone 5 smartphones in China during the three days after its launch there on Friday but concerns over stiff competition still prevailed. Apple shares have tumbled more than 25% in about three months. The major US indices rallied with the Dow Jones Industrial Average gaining 0.76% while the S&P 500 climbed 1.19% to 1430.36. The Nasdaq Composite index outperformed, gaining 1.32%. Market will take leads from readings on housing market index as well as the earnings result of tech giant, Oracle which are scheduled for release on Tuesday. Crude oil January delivery rose US$0.47 a barrel, or 0.54%, to settle at US $87.20 a barrel. In Singapore today: Following last week’s strong rally, Asian stock markets closed mixed on Monday on profit-taking. The Nikkei 225 rose 0.94% after the electoral triumph of Liberal Democratic Party which favours aggressive monetary easing and fiscal spending to beat deflation and tame a strong yen. The Shanghai Composite index extended gains from last week following reports that China will maintain steady economic policies in 2013. However, the Hang Seng index slipped 0.41%. Singapore shares retreated on profit-taking on Monday, snapping eight consecutive days of gains, after Friday’s losses on Wall Street. An unexpected dip in Singapore’s non-oil domestic exports (NODX) which raised the prospect of a technical recession, further dampened sentiment. NODX fell 2.5% YoY in November, against expectations of a 1.7% YoY rise, dragged down by a big drop in electronic exports and fewer shipments to the key markets of Hong Kong, Malaysia and the US. Trading continued to be light ahead of the Christmas and New Year festive season. At closing, the STI index declined 9.73 points, or 0.31%, to 3158.7 points. For every stock that rose, 1.4 fell. Turnover was 1.95 bil shares with a value of $1.02 bil traded. Expect the local bourse to climb higher today taking leads from overnight strength on Wall Street. Positive signs of negotiations in Washington coming closer to arrive at a deal to avert the US “fiscal cliff” before the expiry at the end of this year will underpin advances. Please note that there will be no market commentaries from 24 – 31 Dec 2012. NRA Research will resume with market commentaries on the first trading day of 2013. | |
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