December 31, 2012-Stocks Tentative Hours Away from "Fiscal" Deadline

Trading in the U.S. index futures on Monday, the last trading session of the year, suggests that Wall Street is earnestly hoping that lawmakers will strike a deal to avert a fall off the fiscal cliff. Time is running out for working out a compromise to prevent the coming into effect of $600 billion worth of fiscal tightening measures. That said, the gradual impact of these measures may prevent a hasty retreat into a recession, but will slowly and steadily impact investor sentiment and eat into economic growth. With little catalysts to direct market sentiment, the budgetary deadlock may continue to remain the focal point of investors. The Dow futures are rising 22 points and the S&P 500 futures are adding 4.80 points, while the Nasdaq 100 futures are up 0.50 points. U.S. stocks declined sharply in the week ended December 28th, as fiscal cliff concerns choked any remaining risk appetite in the market. The intransigence of lawmakers in striking a unified approach worried traders to no anvil, sending them scurrying to take cover under safe havens. The holiday-shortened week has a few key economic reports that could clarify the economic outlook further. Although markets are likely to be pre-occupied with the efforts on or the outcome of the fiscal cliff negotiations, traders may also focus on the monthly non-farm payrolls report for December, the weekly jobless claims and the ADP's private sector employment report.