Wednesday, August 27th32.6°C
22568
21900

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

22439


Recent Trending




Today's Market
S&P TSX15602.65-16.56
S&P CDNX1019.343.98
DJIA17122.0115.31
Nasdaq4569.622-1.015
S&P 5002000.12+0.10
CDN Dollar0.9202-0.0001
Gold1281.70-2.1001
Oil93.75-0.13
Lumber347.10-2.10
Natural Gas3.965+0.054

 
Okanagan Companies
Pacific Safety0.20+0.02
Knighthawk0.01-0.005
QHR Technologies Inc1.190.00
Cantex0.07+0.005
Anavex Life Sciences0.24-0.01
Metalex Ventures0.08+0.005
Russel Metals36.60-0.02
Copper Mountain Mining2.96-0.07
Colorado Resources0.18+0.005
ReliaBrand Inc0.115+0.02
Sunrise Resources Ltd0.0250.00
Mission Ready Services0.24-0.01

 



21623

FEATURED Property
19009594118 Gallaghers Blvd. S
3 bedrooms 3 baths
$675,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


How much mortgage should you carry?

There are several things to consider when deciding how much home to buy. 1. Draw up a budget including the new mortgage payments. While the rules used by most lenders require that the mortgage paym...


What is a journey without a destination?

Photo: ContributedI would call it a joy ride... You see a planned project or business has a destination. It may be an ongoing revenue stream, it may be a business value or an exit strategy. If you don...


Joint accounts: what you need to know!

Establishing a joint account may seem like a great strategy at first glance. However, there are many factors that must be considered before taking this action. This article will explore the use of &ls...

_








Member of BC Press Council


23002