Fiscal Cliff deal still hopeful

Stock investors continue to hope that a Fiscal Cliff deal will be reached on Capitol Hill by the end of this week. Stocks, as measured by the closely watched S&P 500 Index, closed at two-month highs yesterday, after several positive headlines from Washington hit the wires during the trading session yesterday.

In economic news, Housing Starts were lower in November while Building Permits, a sign of future construction, were higher than expected. However, Housing Starts were up 22% over the last 12 months, a positive sign, but the industry still has a lot of wood to chop in order to get back to more normal levels.

Mortgage Bond prices have fallen seven out of the last nine business days and the lower prices are luring investors into the market today. I am recommending a Floating bias, if anything changes, I will get back to you.

Leonard Winslow
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