Global Economy Review - December 8, 2012 - Eastern Financiers

- U.S. stocks rose a third week, giving the Standard & Poor's 500 Index its longest winning streak since August, as employment growth topped forecasts and investors weighed prospects for a budget agreement in Washington. The S&P 500 increased 0.13 percent to 1,418.07 for the week. The Dow Jones Industrial Average added 129.55 points to 13,155.13.

- Stocks started the week lower as House Republicans, rejecting Obama's demand for tax rate increases, proposed $1.4 trillion in spending cuts and $800 billion in new revenue by limiting tax breaks and capping deductions for top earners. A day later, Obama told that the Republican offer doesn't go far enough and won't raise the revenue needed to shrink the deficit by $4 trillion over the next decade. On Dec. 5, Obama told a business group that “nobody wants to get this done more than me” and lawmakers probably could solve the budget debate in about a week if Republicans move. U.S. House Speaker John Boehner said on the last day of the week that “there's no progress to report” on talks.

- Investors also watched economic reports. Employment climbed by 146,000 in November and the jobless rate declined to an almost four-year low of 7.7 percent. Orders for equipment such as computers and electrical gear climbed in October by the most in eight months. Service industries in the U.S. unexpectedly grew at a faster pace in November. Confidence among consumers fell more than forecast in December.

- Asian stocks rose for a third week, with the regional benchmark gauge capping the longest winning streak in three months, as China's government pledged to boost urban development and gains in U.S. services and factory orders boosted exporters. The Shanghai Composite Index rose 4.1 percent this week, the biggest such gain since October 2011. China's biggest cement maker, paced gains among construction related shares as the country's new leadership vowed to support urbanization. China's official manufacturing PMI rose to 50.6 in November, the highest reading in seven months. A reading above 50 indicates expansion. Another private survey also showed expansion. China will keep its proactive fiscal policy and prudent monetary policy and promote economic restructuring and urbanization, Chinese Communist Party Secretary Xi Jinping was cited as saying by the official China Central Television on Dec. 6. Japan's Nikkei Average added 0.86 percent. Little damage was reported from a 7.3-magnitude earthquake that struck northeast Japan after markets closed on the last day of the week.

- European stocks rallied for a third week, climbing to an 18-month high, amid increasing optimism that China's economy will sustain its recovery and U.S. lawmakers will reach a compromise to avoid a fiscal deadlock.

Source : Equity Bulls

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