Tax Cut Extensions Raise Hopes for Bullish Future
In addition to introducing new tax relief measures, the bill extends existing Bush-era benefits (due to expire on December 31), with ongoing unemployment benefits being top of the list for the hundreds of thousands of Americans who have been unable to find employment. With consumer dollars being the driving force behind the economy, this is no doubt good news to investors as they wind down for the holiday season, with the general vibe being that 2011 is going to bring more of a bullish market. This has already been supported by stock market listed company Goldman Sachs, which has boosted its economic growth forecasts, along with its Standard & Poor’s 500 targets in response to the tax-cut extension. It is very likely that more banks will follow their lead now that the plan has received the Presidential stamp of approval.
With the coming week cut short by Friday’s public holiday, Monday and Tuesday have no market moving data for Wall Street. Wednesday sees the release of the National Association of Realtors report on existing home sales, which is expected to have risen from October’s 4.43 million to 4.68 million units for November. Also related to the housing market, is the FHFA Housing price index for October which is due on Wednesday morning. Thursday presents the latest data on personal income and expenditure as compiled by the Commerce Department, with economists predicting a 0.2 percent increase in income for November, with personal spending rising 0.4 percent. The Core PCE inflation-indicating component of the report is anticipated to have risen by 0.1 percent for the month of November. Weekly jobless claims from the Department of Labor are expected to have remained steady at 424,000 with continuing claims likely to have fallen from 4,135,000 to 4,075,000. Other reports due on Thursday include the Commerce Department’s durable goods orders; the University of Michigan’s consumer sentiment reading for December; and new home sales index from the US Census Bureau.