This time of the year, we all get treated to (for) an outbreak of predictions for the coming year. Those “in the know” lay out for us what 2013 will look like in the market. I so look forward to the diametrically opposite futures beginning to appear before us …
Optimism about resolving the fiscal cliff abounds. Yesterday’s market move impressed me. Is the optimism misplaced? I don’t think so. The election changed the political landscape and because of that, US politicians will be more amenable to compromise. Will the compromise be acceptable to the market? More than likely, the market will accept the deal, because any deal at this point is better than no deal, and any deal will allay, to a degree, uncertainty in the market. In the meantime, until something definitive happens, buying on the dips and selling on the ups is one way to make your money work.
Once the market gets the political brinksmanship in the US behind it, economic fundamentals will return to the forefront of market thinking. Expect the eyes of the market to turn to China and Europe. Regarding the former, expect the market to be happy with the turnaround in China.
- China’s foreign direct investment inflows fell 3.45 percent in the first 10 months of 2012 from a year ago, but were on track to secure over $100 billion for the third consecutive year, following a raft of other economic indicators for October which pointed to a recovery gaining pace in the world’s second-largest economy.
Regarding Europe, well, that is another story. The politicians there will keep doing what they have been doing for some three years now – placing a finger in the dyke to keep it from breaking and continuing forward on the path to deepening the political and economic integration of the EU. If there is a hope, it would be that once they feel the pressure abating, they will find a way to move from severe austerity to mild stimulation.
- Euro zone finance ministers are expected to give a tentative go-ahead for the disbursement of 44 billion euros in emergency loans to Greece at a meeting later on Tuesday. The ministers will also discuss how to reduce Greek debt and provide two extra years of external financing to help the country achieve its fiscal targets.
Switching gears back to today’s market, have you looked at the VIX lately? If not, do so, as it has steadily come down in the last few days. Despite the deep selling, the fear gauge is lowering. This tells me the potential for near-term volatility is lessening. Either market players are truly settling into the idea that a resolution to the fiscal cliff is coming soon or they are pulling up stakes for the holiday season, simply waiting to see what happens between now and the end of the year. No matter, really, as I like the VIX moving down, for whatever reason.
Here we are, just two days away from Thanksgiving, Normally, I am not big on holidays, but two days out, I find myself actually thinking about the meaning of this holiday. In doing so, I am thinking about my life. I am thinking about how much goodness fills my days. I am thinking about my good health, my contentment with life, and the dear people who truly give me reason to wake up every day with a sense of optimism about the future. Ya know, as the years continue to add up, I find it interesting that I am finding more and more to be thankful for, and that is the dealio.
Trade in the day; Invest in your life …
