Some Christmas Cheer
As a welcome treat, only one of the two main stories this week came from Europe. European Union banks borrowed nearly 500 billion Euros from the European Financial Stability Facility (EFSF). This longer-term financing option is offering banks three-year loans at an average rate of just 1%. Although this lending program alone will probably not solve the sovereign debt crisis, it is designed to help Europe avoid a liquidity crunch.
The second main story this week was the agreement by House Republicans to pass the payroll tax cut extension already approved by the Senate. This, along with relative quietness from Europe, helped settle down the US markets and give them a nice lift for the week. There are only 4 days left in the market year and trading volume will surely be light as many traders take holiday vacations.
Now for some Christmas cheer – A Manpower study shows that businesses are expected to increase staff by a seasonally adjusted net 9% in the first quarter of 2012. This is the largest number we have seen for quite some time. It will be a welcome story indeed if this number plays out to be true.
All of us at Harvest Financial wish you a very Merry Christmas.
December 23, 2011: Market Update
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