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 The markets sold off sharply, closing right near their lows of the day. First, the scoreboard: - Dow: 15,843.5 (-129.6, -0.8%)
- S&P 500: 1,782.2 (-20.4, -1.1%)
- Nasdaq: 4,003.8 (-56.6, -1.4%)
And now the top stories: - Today's sell-off comes a day after Washington agreed on a budget deal.
- Here's Goldman Sachs' Alec Phillips on the deal: "Congressional negotiators have announced an agreement to reverse some of the spending cuts under sequestration over the next two years. Our forecast already assumes a small fiscal deal along these lines, but the spending level for 2014 and 2015 built into the final deal is somewhat higher than we had assumed. If enacted, it would reduce fiscal drag in 2014 by 0.1pp compared with our current expectation. Enacting even a modest deal should also help to ease growing concern about US political dysfunction, particularly regarding fiscal policy. This has practical implications in early 2014, since Congress needs to extend spending authority by January 15 to avoid another government shutdown, and must raise the debt limit again in March. The agreement, if enacted, reduces the already low risk of a shutdown in January, since 2014 spending levels were the main source of disagreement headed into that deadline."
- Weekly mortgage applications climbed for the first time in six weeks. "It was not spectacular," noted UBS's Art Cashin. "Purchase apps rose by merely 1% and [re-financing] by 2%. The good news is that the multi-week decline has ended or at least paused."
- The U.S. posted a $135.2 billion monthly budget deficit in November, which was a bit narrower than the $140 billion expected by Wall Street economists. "Were it to be passed into law, we would expect the budget agreement unveiled last night, which would reduce the sequester cuts scheduled in 2014 by $45bn, to add modestly to the deficit over the course of the fiscal year," said Barclays' Cooper Howes.
- Don't Miss: Jeff Gundlach Takes A Contrarian Stance On Fed Policy In This Sweeping Presentation »
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