Bloomberg:
- Bipartisan House Backs Tax Deal Vote as Next Fight Looms. The fiscal bill passed by Congress solves an immediate dilemma, averting income-tax increases for most Americans while taxing top-earners more, yet leaves unanswered a longer-term question of taming the federal debt. Congress must act as early as mid-February to prevent a default and the dispute may reprise a similar 2011 episode that led to a downgrade of the U.S. credit rating. “Without meaningful reform of entitlements, real spending controls, and a fairer, cleaner tax code, our debt will continue to grow, and our economy will continue to stumble,” House Speaker John Boehner said in a statement after the vote.
- Euro-Area December Manufacturing Shrinks More Than Estimated. Euro-area manufacturing output contracted more than initially estimated in December, adding to signs a recession in the currency bloc may extend into this year as leaders struggle to tackle the sovereign-debt crisis. A gauge of manufacturing in the 17-nation euro area fell to 46.1 from 46.2 in November, London-based Markit Economics said today. That’s below an initial estimate of 46.3 on Dec. 14. A reading below 50 indicates contraction. The gauge has been below 50 for 17 months. The euro-area economy has shrunk for two successive quarters and economists foresee a further decline in gross domestic product in the final three months of last year. The European Central Bank forecasts contractions of 0.5 percent and 0.3 percent in 2012 and 2013. “The euro-zone manufacturing sector remained entrenched in a steep downturn at the end of the year,” Chris Williamson, chief economist at Markit, said in the report. “The region’s recession therefore looks likely to have deepened, possibly quite significantly, in the final quarter.”
- Manufacturing in U.S. Expands After Reaching Three-Year Low. The Institute for Supply Management’s manufacturing index climbed to 50.7 last month from November’s 49.5, which was the weakest since July 2009, the Tempe, Arizona-based group’s report showed today. Fifty is the dividing line between expansion and contraction. The median forecast of economists surveyed by Bloomberg called for a rise to 50.5.
- Gold Reaches Two-Week High as Commodities Gain on Budget. Gold futures for February delivery rose 0.7 percent to $1,688.10 an ounce at 9:41 a.m. on the Comex in New York. Earlier, it reached $1,692.60, the highest for a most-active contract since Dec. 18, after advancing 7 percent last year.
- Drug Approvals Reach 15-Year High on Smoother FDA Reviews. U.S. drug approvals in 2012 reached their highest level in 15 years, led by 11 new cancer therapies, including Ariad Pharmaceuticals Inc. (ARIA)’s Iclusig and Pfizer Inc.’s Bosulif, both aimed at forms of leukemia.
Wall Street Journal:
- Portuguese Austerity in Doubt as President Moves Against Budget. A political rift was opened in Portugal on Wednesday after the country's president sent the 2013 budget to its highest court for review, an unusual move that highlights deepening opposition to a two-year austerity drive. President Anibal Cavaco Silva, who is the head of state and belongs to the same right-of-center political party as Prime Minister Pedro Passos Coelho, signed the budget bill into law on Monday, but expressed reservations the next day. In a late televised address to the nation, he expressed doubts about the budget's "distribution of sacrifices," while calling for an end to the "recession spiral" the country is undergoing.
Fox News:
- Construction spending posts first decline in eight months. Construction spending dropped 0.3 percent to an annual rate of $866 billion, the Commerce Department said on Wednesday. Analysts polled by Reuters had expected a 0.6 percent gain. Private spending on nonresidential projects slipped by 0.7 percent, the fourth decline in six months.
CNBC:
- Why Many Investors Are Selling Today's Big Rally. Many investors were selling into the monster stock rally Wednesday on the notion that the "fiscal cliff" deal hastily hatched New Year's Day did not solve any long-term issues and set the country on the path of several more brinkmanship moments in Congress.
Zero Hedge:
Business Insider:
Reuters:- Here's The Only Fiscal Cliff Detail You Really Care About: How Much YOUR Taxes Will Go Up In 2013. According to the Tax Policy Center, the American Taxpayer Relief Act will mean that the average federal effective tax rate will be 21.7 percent and the average increase is $1,257. Moreover, all Americans who make less that $500,000 per year will see an increase of 1% to 1.4% in their annual effective tax rate as a result of the payroll tax rise.
- Senate Voted on ‘Fiscal Cliff’ Bill 3 Minutes After Receiving It. The U.S. Senate voted 89-8 to approve legislation to avoid the fiscal cliff despite having only 3 minutes to read the 154-page bill and budget score. Multiple Senate sources have confirmed to CNSNews.com that senators received the bill at approximately 1:36 AM on Jan. 1, 2013 – a mere three minutes before they voted to approve it at 1:39 AM.
- U.N. lifts Syria death toll to "truly shocking" 60,000. More than 60,000 people have died in Syria's uprising and civil war, the United Nations said on Wednesday, dramatically raising the death toll in a struggle that shows no sign of ending. In the latest violence, dozens were killed in a rebellious Damascus suburb when a government air strike turned a petrol station into an inferno, incinerating drivers who had rushed there for a rare chance to fill their tanks, activists said.
- Food prices push German inflation above ECB ceiling. Germany's annual inflation rate rose for the first time in fourth months in December on increases in food and package holiday prices, breaching the European Central Bank's target threshold for the broader euro zone of 2 percent. Compared to the prior year period, prices increased 2.1 percent in the final month of 2012, preliminary data from the Federal Statistics Office showed. On the month, consumer prices rose 0.9 percent. Economists surveyed by Reuters had been expecting more modest rises of 1.9 percent year-on-year and 0.7 percent on a monthly basis.
- Car slump in France, Spain and Italy spells gloomy 2013. Car sales in France, Spain and Italy in 2012 fell to the lowest levels in years, with December registration data underscoring the challenges facing the broader European economy. Automakers are facing a sustained slump in the European car market as the euro zone debt crisis and government austerity measures sap consumer demand. "The new car market continues to decline - a trait which we anticipate will continue through the course of 2013," Credit Suisse analyst David Arnold said on Wednesday, adding European auto sales were unlikely to see growth in 2013. Europe's stagnating auto market will have knock-on effects for other economic players including steel producers, Nomura analyst Matthew Kates said in a note, citing forecasts by consulting firm AutoAnalysis. Italy's car sales, down 22.5 percent in December, slumped 19.9 percent for the full year to 1.4 million units, their lowest levels since 1979. "The car market is suffering from an overdose of taxes aimed at hitting, if not criminalising, the acquisition, ownership and use of autos," said Filippo Pavan Bernacchi, the president of Italy's car dealers' trade group Federauto. French car registrations fell 15 percent in December, leaving the full year down 14 percent to 1.90 million vehicles - the lowest since 1997, French industry group CCFA said. He said he expected Italian car sales in 2013 to be close to 1.33 million units. Spain's monthly sales shrank 23 percent, after a 20 percent fall in November. Its full-year total of 699,589 cars, down 13 percent, was the lowest since industry association Anfac began keeping records in 1989.
- Dollar slips vs. higher-yielders but rebounds vs. euro. The dollar fell against higher-yielding currencies such as the Australian dollar on Wednesday after U.S. lawmakers approved a last-minute deal to avert huge tax rises and spending cuts, spurring demand for riskier investments. But the U.S. currency staged a recovery against the euro in late morning trade as some traders booked profits after driving the common currency to a two-week high just below $1.33.
- Beijing land prices soar amid criticism. Land prices have soared at recent auctions in Beijing in a sign that the Chinese property market is heating up again despite a long campaign by the government to cool it down. A large parcel of land in Tongzhou, a Beijing suburb, sold this week for Rmb1bn ($160m), 491 per cent more than the starting price – the highest premium paid at an auction in the capital in two years.
The Australian:
- Rio's(RIO) Walsh warns iron ore price spike won't last. THE current spike in iron ore prices is likely to be temporary, Rio Tinto iron ore chief executive Sam Walsh says, with the company set to stick to its plans to aggressively target cost reductions despite the improving market. In an exclusive interview with The Australian, Mr Walsh attributed the recent rise in iron ore prices to short-term factors such as restocking by steel mills and traders, and the looming cyclone season in the iron ore-rich Pilbara region of Western Australia.
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