Fiscal Cliff Overshadows Upbeat Economic Reports
Stock market shows little reaction to three upbeat economic reports as fiscal cliff anxiety continues to chill investors.
The major American stock indices failed to exhibit any significant investor enthusiasm after the release of three positive economic reports on Tuesday, as concern about the fiscal cliff negotiations overshadowed the good news. Never 
mind that The Conference Board reported that its Consumer Confidence Index for November reached its highest level since February of 2008 (73.7 compared with an expected 73). Never mind that the Case-Shiller Home Price Index 20-city composite rose 3 percent on a year-over-year basis during the third quarter. Never mind that the Richmond Fed’s Survey of Manufacturing Activity for November rose 17 points from negative 7 to positive 9 – despite expectations for a decline to negative 8. The fiscal cliff is coming and nothing else matters. Some Very Scary Charts: AAPL and More
As of 2:07 EST, the Dow Jones Industrial Average declined 33 points (0.26 percent) to 12,933. The S&P 500 Index fell 0.04 percent to 1,405 – staying below its 50-day moving average of 1,424 and just above its 200-day moving average of 1,383 (NYSEARCA:SPY). The S&P 500 chart is now at risk of breaking the inverse head-and-shoulders pattern (see green bar on chart) which had suggested that the index could make a further advance. If the S&P breaks below the “neckline” of the pattern (1,391) a rapid decline could follow. (Chart courtesy of Stockcharts.com) The Nasdaq Composite advanced 0.20 percent to 2,9826 (NASDAQ:QQQ). The Russell 2000 Index advanced 0.28 percent to 811 (NYSEARCA:IWM). The Calm Before the Storm?
The “Dollar Bull” Index ETF (NYSEARCA:UUP) advanced by 5 cents (0.23 percent) to 21.99 as of 12:51 EST.
As of 12:43 EST, the S&P 500 Volatility Index – or VIX – declined 2.84 percent to 15.06 and the VIX Short-Term Futures ETN declined 1.04 percent to 29.43 (NYSEARCA:VXX).
With the exception of Germany’s DAX Index, the major European stock indices retreated from their earlier advances on Tuesday, after investors had a chance to realize that the Greek debt deal reached by EU finance ministers (who now call themselves the Eurogroup) was not much of a deal at all. The Euro STOXX 50 Index finished Tuesday’s trading session with a 0.04 percent decline to 2,543 – staying above its 50-day moving average of 2,509 (NYSEARCA:FEZ). The FTSE 100 Index advanced 0.22 percent to 5,799 (NYSEARCA:EWU). The German DAX Index climbed 0.55 percent to 7,332 (NYSEARCA:EWG). France’s CAC 40 Index squeaked out a 0.03 percent advance to 3,502 (NYSEARCA:EWQ). Spain’s IBEX 35 Index fell 0.14 percent to 7,863 (NYSEARCA:EWP). Italy’s FTSE MIB Index declined 0.26 percent to 15,479 (NYSEARCA:EWI).
As of 12:52 EST, the euro declined 0.24 percent against the dollar, trading at $1.2941 (NYSEARCA:FXE).
On London’s ICE Futures Europe Exchange, January futures for Brent crude oil declined by 55 cents (0.50 percent) to $110.37/bbl. (NYSEARCA:BNO, NYSEARCA:USO). The New Future of Energy Policy
December Gold futures declined by $4.10 (0.23 percent) to $1,745.50 per ounce (NYSEARCA:GLD).
ETF Summary:
SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA) -0.29% as fiscal cliff anxiety keeps investors on the sidelines.
SPDR EURO STOXX 50 ETF (NYSEARCA:FEZ) -0.74% making a more exaggerated decline than the Euro STOXX 50 Index, which dipped only 0.04 percent on Tuesday.
SPDR S&P Retail ETF (NYSEARCA:XRT) +0.69% as the Consumer Confidence Index reaches its highest level since February of 2008, just in time for the holiday shopping season.
iShares Barclays 20+ Year Treasury Bond Fund (NYSEARCA:TLT) +0.26% as declining stock prices reduce investors’ appetite for risk, making the safe haven of government bonds more attractive. Learn More About iShares ETFs
SPDR S&P 500 INDEX ETF (NYSEARCA:SPY) -0.13% investors remain on the sidelines as concerns that stumbling blocks to fiscal cliff negotiations overshadow three upbeat economic reports.
Bottom line: Ongoing concern about the fiscal cliff overshadowed three positive economic reports which were released on Tuesday as investors remained risk-averse while political posturing over budget negotiations continued.
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Disclaimer: The content included herein is for educational and informational purposes only, and readers agree to Wall Street Sector Selector's Disclaimer, Terms of Use, and Privacy Policy before accessing or using this or any other publication by Wall Street Sector Selector or Ridgeline Media Group, LLC.
