Saturday, November 29th-10.6°C
24209
23372

Hours before fiscal cliff is breached

Markets appeared Monday to be taking in stride the prospect that U.S. politicians will fail to agree a budget deal in time to avoid automatic tax increases and spending cuts that many economists think could tilt the world's largest economy back into recession.

With just hours to go before the U.S. falls off the so-called "fiscal cliff," Republicans and Democrats remained divided over tax and spend, raising the prospect that markets will start 2013 without a clear idea of America's budget policy. The main sticking point appears to be what level of taxes are imposed on higher incomes.

Discussions in the Senate broke off Sunday night without an agreement. The Senators will return to their offices Monday to try and hammer out a deal before the deadline.

"With the gulf between both parties still wide and the desire to protect their supporters' key interests so ingrained, it is difficult to see how both sides can compromise enough to agree a deal at this point," said Rebecca O'Keeffe, head of investment at Interactive Investor.

However, it's not the first time that budget discussions in the U.S. have gone down to the wire, and investors remain confident that some sort of deal will be reached, if not Monday then in the coming days or weeks. As a result, they think that the potential damage wrought by higher taxes and spending cuts will be limited.

In addition, a backup proposal that would address only a few issues is expected to be presented by Senate Majority Leader Harry Reid, a Democrat, if a bipartisan deal is not reached.

The prospect of counter-measures to offset the "fiscal cliff" impact helps explain why markets were fairly calm in Europe and Asia, and Wall Street was poised to open higher.

The Canadian Press


Read more Business News

23015


Recent Trending




Today's Market
S&P TSX14744.70-177.74
S&P CDNX741.87-13.53
DJIA17828.240.49
Nasdaq4791.63+4.312
S&P 5002067.56-5.27
CDN Dollar0.8756-0.0004
Gold1175.20-21.40
Oil66.15-7.54
Lumber329.40+1.40
Natural Gas4.295+0.144

 
Okanagan Companies
Pacific Safety0.145-0.005
Knighthawk0.01-0.005
QHR Technologies Inc1.27-0.07
Cantex0.04-0.005
Anavex Life Sciences0.1998+0.0288
Metalex Ventures0.06+0.02
Russel Metals29.91-0.79
Copper Mountain Mining1.94-0.18
Colorado Resources0.125-0.005
ReliaBrand Inc0.0134-0.0001
Sunrise Resources Ltd0.05+0.005
Mission Ready Services0.325+0.005

 
23744


22899

FEATURED Property
21466953865 Kimatouche
4 bedrooms 3 baths
$554,900
more details
image2image2image2
Click here to feature your property
Please wait... loading


Don't stop dreaming!

On Wednesday evening I drove through the Bow Valley in Alberta. It is my old home town... the first place Jackie and I moved to in 1988 when we emigrated. We ended up setting up home there and living...


Second marriage issues

It is not unusual that one or both of the parties planning to marry are approaching marriage for the second time. There are pluses and minuses to this new situation. On the plus side, individuals ente...


The last great Canadian tax shelter

A guide to how flow-through fund limited partnerships can mightily aid your tax planning!The end of the year will raise concerns among many professionals, self-employed persons, business owners and ev...

_



24160

24220


Member of BC Press Council


24018