Trade Deficit/imports, exports weak

While out online late yesterday, today’s paper version of the WSJ is reporting that the “Obama-GOP Cliff Talks Take Positive Step…Neither Side Gives Details, but Strict Moratorium on Public Comments is Considered Sign of Progress at Bargaining Table.” We’ll see but while we wait, small businesses are getting more and more fed up. The NFIB small business optimism index was not optimistic as the index fell sharply to 87.5 in Nov from 93.1, to the lowest since March ’10. Most glaring, those that Expect a Better Economy plummeted to -35% from +2%. The NFIB claims that 1mm small businesses will be hit by the hike in taxes on the top 2%. In Asia, China said bank loans in Nov totaled 523b yuan, bouncing a touch off the lowest since Sept ’11 but was a bit below expectations of 550b. Money supply growth was 13.9% y/o/y vs the est of 14.1%. In response to both data points, the Shanghai index fell .4% off its 4 week high. Business confidence in Australia fell to the lowest since Apr ’09 as they deal with a strong Aussie$ and China moderation. Indonesia left rates unchanged as expected. In Europe, investors are optimistic for the German economy over the next 6 mo’s but less so currently. The ZEW expectations component rose to +6.9 from -15.7, positive for the 1st time since May but the Current situation was +5.7 vs +5.4 (lowest since June ’10), slightly below the est of +6.0. Spain sold 12 and 18 mo bills that went well as 3.89b euros were sold vs their max target of 3.5b. Yields in Spain and Italy are lower after yesterday’s move up. Greek stocks are up 1.6% and the 10 yr bond is at a new high of .44 as more signs point to Greece meeting the 30b euro buyback target level.

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