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| English: U.S. President Barack Obama meets with Speaker of the House John Boehner during the debt ceiling increase negotiations. The official White House caption says "President Barack Obama meets with Speaker of the House John Boehner on the patio near the Oval Office, Sunday, July 3, 2011. (Official White House Photo by Pete Souza" (Photo credit: Wikipedia) |
Economists have said the U.S. risks slipping into recession if hundreds of billions of dollars in expiring tax cuts and automatic spending reductions take effect on Jan. 1 - the so called "fiscal cliff." Congress and the White House must find a compromise to prevent a big hit to the world's biggest economy.
President Barack Obama, fresh from a re-election victory, and House Speaker John Boehner have spoken of compromise but appear to be taking a firm stances on some issues, including whether to raise taxes for the wealthiest.
"Despite comments from the U.S. administration and Congressional leaders of a willingness to compromise, markets remain unconvinced," said Mitul Kotecha, analyst at Credit Agricole CIB.
European stocks lacked momentum in morning trading. Britain's FTSE 100 was up 0.2 percent to 5,778.73 while Germany's DAX edged up by the same rate to 7,174.53. France's CAC-40 lost 0.2 percent to 3,417.64.
Wall Street was expected to make modest gains on the open - Dow futures were 0.2 percent higher at 12,785 while the S&P 500 was up the same rate at 1,378.60.
In Europe, investors will keep their eyes on a meeting of the finance ministers of the 17-country eurozone. The officials are expected to discuss Greece's economy and its bailout program.
Greece is waiting for approval of the next (EURO)31.5 billion ($40 billion) payout of its bailout loan. It faces a bond repayment on Friday it cannot afford.
The finance ministers will only decide on the payout of that money after they receive a report on Greece by international debt inspectors. But Germany's finance minister has said the report would likely not be delivered in time for Monday's meeting.
In any event, no decision on giving Greece the new loans will be made Monday because some eurozone parliaments must approve the deal. Greek lawmakers approved the country's 2013 austerity budget early Monday, essential to unblocking the new payment.
Earlier in Asia, Japan's Nikkei 225 index fell 0.9 percent to close at 8,676.44. Growth figures showed the economy contracted an annualized 3.5 percent rate for the quarter ending September. Most economists forecast a further decline in economic activity for the October-December quarter, which would officially put the world's No. 3 economy in recession, according to the common definition of two consecutive quarters of contraction.
South Korea's Kospi fell 0.2 percent to 1,900.87 and Australia's S&P/ASX 200 lost 0.3 percent to 4,448.00. Benchmarks in Singapore, Taiwan and Indonesia fell. The Philippines and New Zealand rose.
Hong Kong and mainland Chinese stock markets rose following comments over the weekend by Chinese Cabinet officials that the country's economic slowdown has ended, although the economy is not ready to stage a recovery, and that exporters still face tough conditions.
Hong Kong's Hang Seng added 0.2 percent to 21,430.30. The Shanghai Composite Index gained 0.5 percent to 2,079.27 and the smaller Shenzhen Composite Index added 0.5 percent to 832.38.
Jackson Wong, vice president at Tanrich Securities in Hong Kong, cautioned against too much optimism regarding China's economy amid disappointing Chinese loan growth figures.
Lending in October stood at 505.2 billion yuan ($80.3 billion), dropping 81.6 billion yuan from a year earlier, the People's Bank of China said Monday, according to Xinhua news agency. The figure decreased from the 623.2 billion yuan of new yuan loans registered in September.
"Expect light trading this week unless major news comes out," Wong said.
Benchmark oil for December delivery was down 16 cents to $85.91 in electronic trading on the New York Mercantile Exchange. The contract rose 98 cents to finish at $86.07 per barrel on the Nymex on Friday.
In currencies, the euro edged down to $1.2708 from $1.2713 late Friday in New York. The dollar weakened against the Japanese yen, to 79.41 yen from 79.45 yen. ...
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