Daily Data Flow: Cliff Optimism; Halting Milk Price Spike; China to Maintain Monetary Policy
U.S. Stocks Rise Amid Optimism Congress Will Reach Deal (Bloomberg)
U.S. stocks rose on Monday, after the biggest weekly drop for the Standard & Poor’s 500 Index in about two months, amid speculation Congress will reach a deal to head off more than $600 billion in spending cuts and tax increases. “The fiscal cliff is the worse-case scenario, and if we have something better than that, then that’s a positive,” said Walter “Bucky” Hellwig at BB&T Wealth Management in Birmingham, Alabama. “I think we will get a deal. How do we sort that out and the tightening effect on the economy, that will be what the market responds to after the deal.”
Leaders Agree to a Deal Stop Spike in Milk Prices (CNBC)
The top leaders in both parties on the House and Senate Agriculture committees have agreed to a one-year extension of the 2008 farm bill that expired in October, a move that could head off a possible doubling of milk prices next month. Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., blamed House Speaker John Boehner for getting to the point where an extension is the only option. “The lack of action by the House Republican leadership has put us in a situation where we risk serious damage to our economy unless we pass a temporary extension,” she said.
China to Keep Prudent Monetary Policy in 2013: Central Bank (CNBC)
China will stick to a prudent monetary policy next year and keep consumer prices stable, its outgoing central bank governor, Zhou Xiaochuan, said on Monday, in fresh sign that Beijing won’t be changing direction when the new government takes over in 2013. Reiterating China’s long-stated vow to reduce the level of central planning in its economy and make room for more market forces, Zhou also said China will deepen reforms in its financial sector in 2013. “In 2013, we will continue to implement prudent monetary policy and make policies more pre-emptive, targeted and flexible,” Zhou said in a brief new year address. “We will keep overall price levels basically stable and promote healthy and sustainable growth of the economy,” he said. “We will also further deepen financial reforms and the opening up of financial markets.”