Looming United States fiscal cliff still grabs financial markets attention, and housing sector data are to be released demonstrating the effectiveness of the 40 billion quantitative easing plan that was launched by the Federal Reserve.
Obama’s continuous pledges on a budget agreement with leaders of the Congress led the U.S. stock market to open in the green, as presidents statements lifted investors optimism and confidence higher.
Monday, Rep. and Minority Leader in the House Nancy Pelosi voiced support to Obama’s plan to end tax cuts for the high earners. However, Republican Tom Price strongly opposed Obama by stating to CNN that "tax increases to chase ever higher spending is a fools errand." Price suggests that widening the tax base alongside closing the loopholes should help solving the problem.
If both parties fail to reach a compromise, the fiscal cliff will push the world’s largest economy into recession and will have a negative effect on the global economy. The fear over the fiscal cliff stole the spotlight from the housing starts report.
Housing Starts report is expected to project a monthly change of -3.7% with an annual rate of 840.000 houses compared to the previous monthly change of 15% with an annual rate of 872.000 houses. Building permits are expected to decline by 2.9% with an annual rate of 864.000 permits compared with the previous reading that showed an increase of 11.6% with an annual rate of 894.000 permits.
On Tuesday, Ben Bernanke, the head of the Federal Reserve, is to hold a press conference. Investors will be looking to see if Bernanke will talk about the future of quantitative easing plans, which remain unchanged since the Federal Reserve launched the third round.