No. of Recommendations: 8

Economic Forecast Is Sunnier, but Washington Casts a Big Shadow

New York Times, December 16, 2012


The nascent housing rebound, the natural gas boom, record profit margins, a friendlier credit market for small businesses, along with pent-up demand for autos and other big purchases, could in combination unleash growth and hiring that the economy needs. ...Household formation is picking up: young people are finally moving into their own homes, as are other Americans who had lived with family or friends. ...consumers are unleashing some of their pent-up demand for cars. ...

Estimates for the last quarter of 2012 are hovering around an unusually weak 1 percent annualized rate.

That dismal pace is driven partly by drags from Europe’s recession and China’s slowdown; partly by companies readjusting after potentially overstocking their back-room shelves in the third quarter; and largely by worries about the so-called fiscal cliff of spending cuts and tax increases set for early 2013. ...

The nonpartisan Congressional Budget Office has estimated that the entirety of the so-called fiscal cliff would shave about three percentage points off gross domestic product growth next year. ...
[end quote]

This week's Control Panel is similar to last week's. The market is neutral to slightly optimistic.$INDU,$S...$IRX,$US...$SPX&p=D&yr=1&m...

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