EmailThe eurozone debt crisis is still with us. North Korean leader, Kim Jong Il, is not.
The aforementioned despot died of a heart attack over the weekend. It has been reported that his 27-year old son, Kim Jong Un, will take his father's place. What that means for North Korea and the surrounding region is unclear, although some have said Kim Jong Un is a chip off the old block. If so, the world is not a better place with Kim Jong Il no longer a part of it.
In any event, the uncertainty of what will come next in the nuclear-armed North Korea weighed on Asian markets, most of which dropped at least 1.0%. South Korea's Kospi Composite suffered the biggest loss, falling 3.4%.
Western markets are faring better than their eastern counterparts. Most European bourses are posting modest gains while the S&P futures are trading 0.3% above fair value.
Bond markets in the eurozone that have been reasonably well behaved in the face of downgrade threats from the ratings agencies have been an underpinning factor. With Congress still fighting over extending the payroll tax cut and unemployment benefits, however, buyers aren't showing much conviction yet on the heels of a 3.0% decline last week.
Briefly, the Senate over the weekend agreed to a plan that would extend the payroll tax cut for two more months, with an expectation that a debate on a longer extension would be renewed after the holidays. The House leadership has objected to that plan, so the negotiations continue.
There isn't any corporate news of note moving the market, although it is worth noting that Dow component Procter & Gamble (PG) has confirmed that it has currently halted full-time hiring for its fiscal year, which ends June 30. The only context behind that development is that P&G said it has already generally met its hiring goals for this fiscal year.
This will be a busy week of economic reporting, beginning with the NAHB Housing Market Index (Briefing.com consensus 19; prior 20) today at 10:00 a.m. ET. Reports for housing starts, existing home sales, initial claims, Q3 GDP, leading indicators, durable orders, personal income and spending, and new home sales will follow later in the week.
On a related note, Richmond Fed President Lacker is scheduled to give a speech at 1:15 p.m. ET on the economic outlook.
The week leading up to Christmas is oftentimes a slow week. From a headline perspective, that probably won't be the case this year.
There is a lot of unfinished business on a lot of important matters. Trading volume will likely be on the weak side again, barring some major surprises -- positive or negative -- along the way.
--Patrick J. O'Hare, Briefing.com
Patrick J. O'Hare is Chief Market Analyst for Briefing Research, Briefing.com's institutional research service. To request a free trial, please email researchsales@briefing.com.
