Before the Open (Jan 2)

Good morning. Happy Wednesday. Happy New Year.
The Asian/Pacific markets mostly posted solid gains. Australia, China, Hong Kong, Singapore, South Korea and Taiwan each rallied more than 1%. Europe is currently up across-the-board. Austria, France, Germany, Amsterdam, Stockholm, London, the Czech Republic and Greece are up more than 2%. Futures here in the States point towards a big gap up for the cash market.

The dollar is down. Oil and copper are up. Gold and silver are up. It’s party time.
As dysfunctional and divided as Washington is, they were very predictable with regards to how they handled the fiscal cliff. Instead of agreeing in 2012 and having a black mark on their voting record, they waited until after midnight on New Years – after the automatic tax increases had already taken place – to vote. So now their voting records indicate they voted for a tax decrease, not a tax increase. The world is celebrating clarity.
The market hates uncertainty. The market can handle most bad situations as long as it knows what the situations are. With a deal, the guessing game can end. The definition of “rich” is changing, and those that meet the requirements won’t be happy with their new tax bill, but Wall St. still celebrates the known fact because it’s better than an unknown guess.
The combination of Monday’s huge up day and today’s gap up will put the S&P just a couple points shy of its mid December high. Whether the gains hold is another story. Whether this is just a knee-jerk reaction that will get sold into is something we’ll have to look out for. Charts of individual stocks look decent, but several breadth indicators have taken a turn down and warn of weakness beneath the surface.
There isn’t much company-specific news out.
Avis Budget Group (CAR) is buying Zipcar (ZIP).
PMI’s from around the world came in at very good levels.
Otherwise it’s all about the fiscal cliff deal. We know what the news is; now we get to see the reaction to the news. More after the open.
headlines at Yahoo Finance
headlines at MarketWatch
today’s upgrades/downgrades
this week’s Earnings
this week’s Economic Numbers