Hopes High For Tax Cut Extension
Economic recovery and stability are undoubtedly common goals for U.S. policymakers regardless of where their allegiance may lie politically, but that does not mean that there is complete agreement on how to reach that goal. The economic turmoil experienced by governments worldwide for more than two years now, has presented a number of unprecedented circumstances that have called for some drastic measures to deal with, and decision-makers charged with overseeing the economic welfare of many countries have often found themselves sailing uncharted waters. Investors have certainly been on a roller-coaster ride of note, with high-speed trading presenting additional challenges to overcome, making the stock market a place that is not for the faint-hearted to venture into.
In the upcoming week Wall Street investors will be looking at a number of factors in their investment decision making process. Among these factors are the current discussions and negotiations regarding the extension of tax cuts implemented by the Bush administration, which are due to expire on December 31. Top senators from both the Democratic and Republican parties have indicated that a decision is likely to be reached soon, but how soon and which direction the decision will go remain unknown. Reportedly Republicans are pushing for the extension of current rates for all taxpayers, while Democrats favor letting rates increase for the two percent of Americans in the highest income bracket. With Friday’s jobs report revealing that the unemployment rate stands at 9.8 percent, decision makers will be feeling the pressure to reach an urgent decision in favor of an extension.
Other items for stock market investors to ponder on in the coming week include a consumer credit report on Tuesday; the Department of Labor‘s weekly jobless claims on Thursday, where the new claims for unemployment is expected to fall by 6,000 to 430,000; the continuing claims report reflecting the number of Americans receiving benefits for a week or more, which is also expected to drop; and the Commerce Department wholesale inventories report which is expected to show an increase of 0.8 percent in October. Friday sees the release of the consumer sentiment index for November as measured by the University of Michigan, with reports on export and import prices being due in the morning, as well as the Commerce Department report on the trade balance which is expected to remain unchanged.