Four more weeks of careening from crisis to crisis and then we can kiss 2012 goodbye.  But that still leaves plenty of time for a crash of major proportions.

 The Big Picture 

The fate of citizens and investors rests in the hands of Congress as the two political parties jockey for positions in the fiscal cliff fandango.  Will this pas de deux lead to catastrophe or comfort?  The world is watching. 

It could be worse. We could be like the Euro zone with too many cooks spoiling the broth, yet no incentive to alter the recipe.  The good news is that markets appear to have adjusted to the ongoing crisis that is the Euro.  I’m not sure markets are prepared to accept a total standoff in Washington – a disaster of our own making and one that is totally avoidable. 

In the meantime, we have a host of economic data to digest, many of which will be distorted by Hurricane Sandy.This week kicks off with August construction spending and the September Institute of Supply Management’s reading on manufacturing.  Tuesday sees the release of November vehicle sales.  Wednesday we get revised data on third-quarter productivity along with August factory orders.  Thursday’s weekly unemployment claims report will be overshadowed by Friday’s release of the November Employment Situation Report.   Hurricane Sandy is expected to have cut the number of jobs created in November to just 80,000, less than half of the number of jobs created in October.  The bright spot may be the University of Michigan’s consumer confidence reading for December.

 The following week has the October Trade balance release on Tuesday, the same day the Federal Reserve starts its two-day policy meeting.  Wednesday, December 12th sees November export/import prices, the November Treasury budget data as well as the Federal Reserve policy statement and Chairman’s press conference. 

Thursday,   December 13th has weekly jobless claims, November producer price index and retail sales figures and October business sales and inventory data.  The week ends with November consumer price index, industrial production and capacity utilization numbers. 

I, Investor 

December is usually a good month for stocks.  Out of the past 20 years, 16 have seen a good year-end rally.  Stocks have defied most expectations this year and investors remain overall optimistic.  How about consumers?  The holiday shopping season is make-or-break time for retailers.  

Will we see a Santa Claus rally?  It all may rest with Congress, and only time will tell. 

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