Fiscal Cliff

   Don’t expect a deal on the “Fiscal Cliff” issue until at least December 20^th. The amount of work needed and the amount of legislative days that exist makes it conceivable that nothing will come out till December 20^th.   This is the schedule going forward.

  Nov. 13 – Year end, Lame Duck period for Congress begins...Nov. 19 – 23^rd, Thanksgiving break…Nov. 26^th, Fiscal Cliff debate likely to begin…Then Jan 1^st, Fiscal Cliff IMPACT!!!! ….JAN. 2^nd, Spending cuts triggered ($78 billion)…Jan 3^rd, 133rd Congress takes office…And finally Jan 20^th, the Inauguration.

  The Fiscal Cliff tax increase equals 1.3% to 1.5% of the Gross Domestic Product, and the last tax increase of this size caused a 35% market drop in one year.

  Today stocks surge on Fiscal Cliff optimism, and stocks have biggest gains since September 13^th. The S&P 500 for example erases last week’s losses. Again, the markets are moving on news. Positive news we go up, Negative news, down.

  Looking at Europe, expect Spain to have more problems in the next couple of weeks, and in another part of the world has Israel stepping up targeted attacks on heavily populated Gaza.

  World events will continue to move the markets.

 Bruce Cortez

 Follow me at Twitter.com/StockMktTeacher

The Markets today and the Direction of our Economy

   If you look at what the markets have been doing since the election, I think it’s a clear indication that investors are worried about what’s not going to happen.

  If you look at what the stock market did, it immediately dropped, because investors don’t know what is going to happen…more of the same, or something different.

  Investors need some kind of solution about the ‘Fiscal Cliff’, or some kind of indication that we’re getting a solution. If not, the markets will get uglier.

  Fortunately for the U.S. it looks like we’ve gotten away from the European issues (problems of just spinning their wheels with no improvement), because it looks like the U.S. economy, can gain some traction. But if we don’t see something by our government soon, all will grind to a halt.

Bruce Cortez

Follow me at http://www.Twitter.com/StockMktTeacher