We have put the election behind us and we weren’t really that surprised that Obama won. It’s hard to unseat a sitting president unless the country is complete disarray and contrary to Fox News, it isn’t.
What is still in disarray are the areas most affected by Superstorm Sandy. There are whole sections of Queens and Staten Island that are totally destroyed and people’s lives may never get back to normal there and that is the true sadness of this disaster. We will help them rebuild but will they ever be the same? We hope and pray that with support and financial aid they can rebuild.

The looming fiscal cliff scenarios have finally prompted the market to react to developments that will impact us all. In a way we are glad we are dealing with this now and agree with the markets reaction to the possibilities.

We also believe that should no resolution come about before the end of the year the market will continue to test various support levels. With the tax cuts expiring and a projected increase in taxes, including Capital Gains, we can really find no compelling reason to be in stocks at this time.

Now, here is how we see this playing out. We believe that we will get a compromise that will give a little, take a little; depending on which side of the aisle you sit. No one argues that we need to reduce the debt burden of our government but no one has a solution that won’t wreak havoc on financial markets and the economy as a whole.

Having politicians work together to solve a problem is next to impossible but we do believe that we will get some partial resolution and we will not fall off of any cliff.

This coming week should hold no major surprises. Earnings are due out for a couple of large retailers and people like making projections for Christmas sales during this week. We think retailer’s numbers will be weaker than the same quarter last year but they will be optimistic for the coming Christmas season. Couple of key factors involved here. Higher Consumer sentiment numbers and something that isn’t real but in the quest for profits is real, scarcity of some hot items due to supply chain problems due to Superstorm Sandy.

We all know this non-sense but tell that to a parent that is looking for a particular Furby doll and the store says they haven’t received their shipment due to the storm. We are cynics but it’s the Christmas season and profits are made on scarcity.

Consumer Price Index will be out and we would be shocked if it showed any uptick at all.
Jobless claims will come in on the low side of the estimates and the underlying strength of the US economy will continue to increase. Slowly.