Stock markets around the globe continued their rise on Wednesday in anticipation that a fiscal cliff deal might be closed with just two weeks before the Dec. 31 deadline. The FTSEurofirst 300 added an extra 0.2 percent to hit 1,139.85 by 0808 GMT, The Stoxx 600 also climbed for the first time in four days yesterday as Obama changed his position on tax increases while the Euro hit multi-month highs, the MSCI Asia Pacific Index rallied 1.1 percent and the Nikkei 225 Stock Average soared 2.4 percent amid optimism the BOJ will go for for further monetary stimulus.
The fiscal cliff is now just two weeks away. Most Americans will be really affected by the huge across-the-board spending cuts and tax hikes unless a compromise from one of the parties is done. President Obama’s latest proposal on Monday extended the payroll tax cut, thus even though most working class citizens don’t notice any increase in their tax rates in 2013, they could still spot an expansion in the tax bill of about $1,000 for the average worker. Meanwhile, Boehner stated in a press conference that he has to bypass talks with the White House and pull the vote on his plan now because the president’s latest fiscal cliff proposal still isn’t balanced between taxes and cuts.
German Business Confidence
Optimism for a recovery in the European region next year was lifted by an increase in the German business confidence in a second month in row after a decline in October. Germany, Europe’s largest economy sent signals that while the last quarter of 2012 was pretty gloomy for businesses, but there are hopeful signs for stabilisation next year. The data boosted European stocks especially banking shares to their highest levels of the year. HSBC Holdings Plc added 1.39 percent, Barclays PLC advanced 2.11 percent and the Deutsche Bank-RG has gained 1.38 percent.
S&P upgrades Greece
Although not a big surprise, the upgrade in Greece’s credit rating by the S&P was still positive news as it helped continue the year-end rally. Futures on the S&P 500 Index expiring in March increased 0.2 percent, whereas the gauge added 15 percent the current year as the ECB announced an unlimited bond-buying plan and the Federal Reserve began a third round of asset purchases.