“It is quite clear both sides want to come to a compromise and that a reasonable compromise is available,” said David Kelly, chief global strategist at J.P. Morgan Funds, about efforts to avoid automatic tax increases and spending cuts scheduled to begin in January.
Stocks on Friday finished with daily gains and weekly losses, with the market getting a lift late in the week on optimism that the White House and Congress would reach a budget agreement.
“I think the surprise is going to be a more cooperative environment from our leaders going forward. Maybe that is what the stock market sniffed out last Friday with its intraday upside reversal on heavy volume,” wrote Jeffrey Saut, chief investment strategist at Raymond James & Associates, in an email.
As merchants approach the holidays, some are seeing worrisome signs that Americans are tightening their purse strings.
On Sunday, President Barack Obama expressed confidence that the United States would “get our fiscal situation dealt with.”
The president spoke at a news conference in Bangkok, Thailand, the start of a three-nation Asian trip.
Hope that a truce could keep the Israeli army from invading the Gaza Strip for the first time in nearly four years also bolstered investor sentiment.
“News reports coming out of Europe overnight suggest that Egypt has stepped in to mediate a settlement of the escalating military conflict between Israel and Hamas in Gaza,” said Fred Dickson, chief investment strategist at Davidson Cos., in a research note.