Consumer sentiment stalls ahead of Black Friday

NEW YORK (Reuters) - Consumer sentiment weakened in November as the holiday shopping period was getting underway amid growing uncertainty over federal tax and spending programs next year, a survey released on Wednesday showed.
The Thomson Reuters/University of Michigan's final reading on consumer sentiment came in at 82.7, a touch up from 82.6 in October but down from a preliminary reading of 84.9 released earlier this month.
It was also below the median forecast of 84.5 among economists polled by Reuters.
The softening in sentiment comes as the holiday shopping season kicks off with the so-called Black Friday shopping day after this week's Thanksgiving holiday. The period is critical for retailers, who often see their books turn from loss to profit at the end of the year.
"This holiday season might be softer than last year," said Conrad Dequadros, senior economist at RDQ Economics in New York, citing the late October storm that crippled the Northeast and the ongoing impasse in Washington over budget talks.
But Dequadros added: "Even with the pullback, we are sitting near the high of the recovery."
The main culprit behind the index's softening came in how consumers see the future. The survey's gauge of consumer expectations slipped to 77.6 from 79.0 in October and was lower than the forecast of 80.1.
"The late-month retreat was accompanied by more economic uncertainty about future federal taxes and spending programs and the inability of the political parties to reach a settlement," survey director Richard Curtin said in a statement.
The survey's barometer of current economic conditions fared better. The gauge, which measures how consumers view their present situation, rose to 90.7 from an October final reading of 88.1 and just above a forecast of 90.6.
U.S. retail sales should rise 4.1 percent this holiday season, slower growth than in the past two years as mixed economic data and political uncertainty weigh on consumers, the National Retail Federation said in October.
Peter Boockvar, a portfolio manager at Miller Tabak, said the confidence numbers in themselves are not a reliable indication of how holiday sales will shape up.
"In terms of holiday spending, confidence is a coincident indicator and thus won't tell us much about how much spending we'll see relative to the same time last year," he said in an e-mail.
The Thomson Reuters/University of Michigan survey's one-year inflation expectations were steady at 3.1 percent, while the survey's five-to-10-year inflation outlook was at 2.8 percent from 2.7 percent.

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Obama vows to press ahead on fiscal cliff solution

WASHINGTON (AP) — President Barack Obama says he'll press ahead with Congress to prevent across-the-board tax increases set to strike taxpayers Jan. 1 after House GOP leaders unexpectedly put off a vote on legislation calling for higher rates on million-dollar earners was abruptly scrapped Thursday evening.
The measure "did not have sufficient support from our members to pass," House Speaker John Boehner, R-Ohio, conceded in a brief statement.
At the White House, Press Secretary Jay Carney said that Obama's "main priority is to ensure that taxes don't go up on 98 percent of Americans and 97 percent of small businesses," citing statistics associated with Obama's campaign promise to increase top tax rates on household earning more than $250,000 a year.
"The President will work with Congress to get this done and we are hopeful that we will be able to find a bipartisan solution quickly that protects the middle class and our economy," Carney said. Pointedly, the statement didn't say whether Obama would work with Boehner to revive stalled talks with Boehner or turn to the Democratic-controlled Senate to try to salvage the situation.
Boehner's attempt to tactically retreat from a longstanding promise to maintain Bush-era tax rates for all was designed to gain at least some leverage against Obama and Senate Democrats in the fiscal cliff endgame. Thursday's drama was a major personal defeat for the Speaker, who retains the respect and affection of his tea party-infused conference, but sometimes has great difficulty in getting them to follow his leadership.
Boehner's Plan B was crafted to prevent tax increases set to kick in on Jan. 1, 2013, on virtually every taxpayer. But it also would have provision that would have let rates rise for those at the upper income range — a violation of long-standing Republican orthodoxy — triggered the opposition of anti-tax lawmakers inside the party.
The hope was that successful House action on the measure would force Senate Democrats to respond. But Senate Majority Leader Harry Reid, D-Nev., made is clear that Plan B would have been dead on arrival in the Senate.
"Speaker Boehner's plans are non- starters in the Senate," Reid said.
Boehner announced he would move to Plan B after with testing the waters with fellow Republicans regarding a possible pact with Obama on tax increases of $1 trillion — including the breakthrough proposal on higher tax rates — and finding them not very receptive.
Thursday's events leave little time for Obama and bruised lawmakers to prevent across-the-board tax increases and deep spending cuts from taking effect with the new year. Economists say the combination threatened a return to recession for an economy that has been recovering slowly from the last one.
The House will not meet again until after Christmas, if then, and the Senate is expected to meet briefly on Friday, then not reconvene until next Thursday.
In his written statement, Boehner said the House has previously passed legislation to prevent all the tax increases from taking effect, and noted that earlier in the evening it had approved a measure to replace across-the-board spending cuts with "responsible" reductions.
In arguing for legislation with a million-dollar threshold for higher tax rates, Boehner said the president has called for legislation to protect 98 percent of the American people from a tax hike. "Well, today we're going to do better than that," he said of the measure that raises total taxes by slightly more than $300 billion over a decade. "Our bill would protect 99.81 percent of the American people from an increase in taxes."
Democrats said that by keeping tax rates unchanged below $1 million — Obama has offered a compromise $400,000 level — Republicans had turned the bill into a tax break for the wealthy. They also accused Republicans of crafting their measure to impose a tax increase on 11 million middle class families.
"This is a ploy, not a plan," said Rep. Sander Levin, D-Mich. He accused Republicans of being "deeply cynical," saying the legislation would scale back some education and child tax credits.
A companion bill on the evening's House agenda, meant to build GOP support for the tax bill, called for elimination of an estimated $97 billion in cuts to the Pentagon and certain domestic programs over a decade. It cleared the House on a partisan vote of 215-209 and is an updated version of legislation that passed a little more than six months ago.
Those cuts would be replaced with savings totaling $314 billion, achieved through increases in the amount federal employees contribute toward their pensions and through cuts in social programs such as food stamps and the health care law that Obama signed earlier in his term.
Ironically, the votes were set in motion earlier in the week, after Boehner and Obama had significantly narrowed their differences on a compromise to avoid the fiscal cliff.
Republican officials said that members of the GOP leadership had balked at the terms that were emerging. Democrats said Boehner's abrupt decision to shift to his Plan B — legislation drafted unilaterally by Republicans — reflected a calculation that he lacked support from his own rank and file to win the votes needed for the type of agreement he was negotiating with the president.
Asked at a news conference a few hours before the scheduled vote if that were so, Boehner avoided a direct answer. "Listen, the president knows that I've been able to keep my word on every agreement we've ever made," he said.
By any measure, the two bills in the House were far removed from the latest offers that officials said Obama and Boehner had tendered. And the two men don't seem to be that far apart.
Obama is now seeking $1.2 trillion in higher tax revenue, down from the $1.6 trillion he initially sought. He also has softened his demand for higher tax rates on household incomes so they would apply to incomes over $400,000 instead of the $250,000 he cited during his successful campaign for a new term.
He also has offered more than $800 billion in spending cuts over a decade, half of it from Medicare and Medicaid, $200 billion from farm and other benefit programs, $100 billion from defense and $100 billion from a broad swath of government accounts ranging from parks to transportation to education.
In a key concession to Republicans, the president also has agreed to slow the rise in cost-of-living increases in Social Security and other benefit programs, at a savings estimated at about $130 billion over a decade.
By contrast, Boehner's most recent offer allowed for about $940 billion in higher taxes over a decade, with higher rates for annual incomes over $1 million.

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NRA returns to public debate, to meet with media

WASHINGTON (AP) — One week after the mass shootings that killed 26 people at a Connecticut elementary school — 20 of them children — the nation's largest gun-rights lobby is returning to the spotlight as Congress prepares to consider tighter restrictions on firearms in the new year.
The 4.3 million-member National Rifle Association largely disappeared from public debate after the shootings in Newtown, Conn., choosing atypical silence as a strategy as the nation sought answers after the rampage. The NRA took down its Facebook page and kept silent on Twitter.
Unlike its actions in the wake of other mass shootings, the group did not put out a statement of condolence for the victims while simultaneously defending the rights of gun owners.
That strategy, however, is set to change, starting with a news conference Friday.
In the lead-up, the group re-activated its Facebook account — it has 1.7 million members — and its Twitter feed now warns supporters that "President Obama supports gun control measures, including reinstating an assault weapons ban." The group also announced that its top lobbyist, Wayne LaPierre, planned to appear Sunday on NBC's "Meet the Press" program.
It's an about-face from the group that ignored requests for comment and shunned media attention for four days following last week's shootings.
"The National Rifle Association of America is made up of 4 million moms and dads, sons and daughters and we were shocked, saddened and heartbroken by the news of the horrific and senseless murders in Newtown," the group said in its first public statement since the shootings, released Tuesday. "Out of respect for the families, and as a matter of common decency, we have given time for mourning, prayer and a full investigation of the facts before commenting."
The group also promised "meaningful contributions to help make sure this never happens again" and announced plans for Friday's news conference on what is, in reality, the last real work day before Washington scatters for the long Christmas holiday.
Since the slayings, President Barack Obama has demanded "real action, right now" against U.S. gun violence and called on the NRA to join the effort. Moving quickly after several congressional gun-rights supporters said they would consider new legislation to control firearms, the president said this week he wants proposals on reducing gun violence that he can take to Congress by January.
Obama has already asked Congress to reinstate an assault weapons ban that expired in 2004 and pass legislation that would end a provision that allows people to purchase firearms from private parties without a background check. Obama also has indicated that he wants Congress to pursue the possibility of limiting high-capacity magazines.

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Washington Saying Goodbye to Inouye at Memorial

Admirers will bid farewell to Democratic Sen. Daniel Inouye at a memorial service before a final trip home to his native Hawaii.
President Barack Obama and Vice President Joe Biden were to be among those offering tributes during the ceremony Friday at Washington National Cathedral, along with Senate Majority Leader Harry Reid, D-Nev., and Veterans Affairs Secretary Eric Shinseki.
Biden also spoke at a ceremony Thursday at the Capitol, where Inouye was given an honored resting place: beneath the dome.
Inouye was only the 31st person to lie in state in the rotunda, the most recent being former President Gerald R. Ford nearly six years ago.
During the day, congressional staff, tourists and other Capitol Hill visitors filed past to pay their respects at Inouye's casket, draped with an American flag.
Inouye died Monday of respiratory complications. He was 88.
After becoming Hawaii's first congressman in 1959 following statehood, Inouye was elected to the Senate in 1962. He was the first Japanese-American elected to both houses of Congress and was serving his ninth Senate term at the time of his death.
He was awarded a Medal of Honor, the nation's highest military honor, for bravery during World War II, including a heroic effort that cost him his right arm. He later became one of the nation's most influential politicians, playing key roles in congressional investigations of the Watergate and Iran-Contra scandals.
Inouye also was the second-longest serving senator in U.S. history.
As a legislator, his specialty was steering federal money back home to help build the kinds of roads, schools and housing that Americans on the mainland took for granted.
Inouye's body is to be returned to Hawaii on Saturday.

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Soccer-Scottish Premier League fixtures

Dec 21 (Infostrada Sports) - Fixtures from the Scottish Premier League matches on Friday
Friday, December 21 (GMT)
St. Mirren v Motherwell (1945)
Saturday, December 22 (GMT)
Aberdeen v St. Johnstone (1500)
Celtic v Ross County (1500)
Inverness Caledonian Thistle v Dundee (1500)
Sunday, December 23 (GMT)
Kilmarnock v Hibernian (1500)
Hearts v Dundee United (1630)

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S.Africa's rand, bonds edge up ahead of data

JOHANNESBURG (Reuters) - South Africa's rand firmed marginally on Tuesday ahead of a slew of domestic economic data but stayed within its recent trading range, awaiting further direction from global markets.

The rand was trading at 8.6700 against the dollar at 0640 GMT from Tuesday's close of 8.6725.

"The data today will not have much impact on the rand. We will continue to look at international factors," said Ion de Vleeschauwer, Bidvest Bank's chief dealer.

"We're really stuck in the ranges between 8.60-70 and that will probably continue for the rest of the week."

The rand was supported by a stabilising euro as nerves calmed over Italy's latest political turmoil and prospects of more stimulus from the Federal Reserve pinned down the dollar, although weaker-than-expected data could put it under pressure.

Retail sales figures are due at 0700 GMT, with economists expecting year-on-year spending growth on the high street to have slowed to 4.0 percent in October.

At 1100 GMT, economists expect manufacturing output to have fallen 1.2 percent, hit by labour unrest in the mines.

The rand has lost more than 7 percent since the start of the year and came under pressure intense pressure from August because of wildcat strikes in the mining sector and a yawning current account deficit.

Government bonds rose, pushing yields down 2 basis points to 7.335 on the benchmark 2026 issue and 1 basis point to 5.46 percent for the shorter-dated 2015 note.

The Treasury will auction 2.1 billion rand of debt spread over the 2031 and 2048 government bonds at 0900 GMT.

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Mexican president confident of key reforms in 2013

MEXICO CITY (Reuters) - Mexican President Enrique Pena Nieto said on Monday he is confident that reforms to shake up state oil giant Pemex and the country's tax regime, key planks of his drive to accelerate economic growth, will be approved in 2013.

The youthful Pena Nieto took office on December 1 pledging to fire up the economy after years of underperformance, during which it fell behind its big Latin American peer Brazil.

In his election campaign he identified energy and tax reforms as central to raising growth to rates of around six percent per year, or about three times the average rate of the past decade.

Though his Institutional Revolutionary Party (PRI) fell short of a congressional majority in regaining the presidency after 12 years on the sidelines, Pena Nieto is adamant he can pass energy and tax reforms that have foundered in the past.

"I would give a horizon of one year for these reforms," the 46-year-old told Reuters in an interview in Mexico City.

"Next year will be the time for all of it to happen from scratch: presenting the initiative, the necessary consensus to back it up and make them happen, and get the required approval."

He did not provide details on what shape the reforms would take beyond saying that he looked forward to Mexico forging "strategic" tie-ups with the private sector in the oil industry.

Asked whether he could secure the support in Congress to approve his plans, Pena Nieto said he was "very upbeat," noting that he has already signed a pact with the leading political parties to work together on reforms.

He said he was also confident of reaching consensus next year on his aim to provide universal social security coverage in Mexico, and that he would press for constitutional change to spur more competition in the telecommunications sector.

He did not provide more details. Mexican television is dominated by broadcasters Televisa and TV Azteca while the world's richest man, Carlos Slim, has a tight grip on the fixed-line and mobile phone markets.

Pena Nieto's predecessor as president, Felipe Calderon of the conservative National Action Party, or PAN, failed to win Congress' support for a major reform of Pemex.

But Calderon took the first steps towards opening it up to outside investment, putting out incentive-based contracts to private firms to improve the efficiency of the oil industry.

Pemex has struggled to make the most of Mexico's crude oil reserves, and Pena Nieto has pledged to open up the company to more private investment. To make it worthwhile for investors, Pena Nieto believes a constitutional change is needed.

STRATEGIC ASSOCIATION

Mexico relies on oil revenues to fund nearly a third of the federal budget, which has not only concentrated much power in Pemex but also left it open to over-exploitation by the state.

The dependence on oil revenues is regularly cited as an obstacle to Mexico's efforts to improve its credit rating. The fact that no party has had a majority in Congress for 15 years has stood in the way of a far-reaching tax reform.

Pena Nieto's planned tax reform is tricky because it could involve applying value-added tax (VAT) to food and medicine for the first time. That could risk opposition inside the PRI since it would hit the poor, who make up roughly half of Mexico's population.

The president declined to say how his government would approach the subject of changes to VAT, though many experts see few ways of quickly raising more revenues without it.

Mexico has one of the smallest tax takes in Latin America, collecting revenues worth only about 11 percent of gross domestic product, excluding oil income.

Mexico's constitution stipulates that the right to exploit crude oil belongs to the state, and the new government must find a way of allowing private investors to help find the crude without surrendering control of its natural resources.

"I believe constitutional reform is what enables us to generate the legal certainty for the opportunities of getting Mexico more private investment to develop its energy infrastructure," Pena Nieto said.

Created when the PRI nationalized the oil industry in 1938, Pemex became a symbol of Mexican self-sufficiency, and many attempts to reform the lumbering monopoly have foundered.

Output at Mexico's largest oil fields fell sharply between 2004 and 2009, although it has since stabilized. However, the government has said output will stagnate without significant new investment, and the world's no. 7 oil producer risks becoming a net oil importer if it fails to improve production trends.

Pena Nieto has held up Brazil's state-owned oil firm Petrobras as a model for Mexico to follow. Petrobras trades shares on the stock exchange and Pena Nieto has said a partial listing of Pemex could be a possibility in the future.

For now, Mexico needed to create alliances with private capital to get the best out of Pemex, he said.

"Brazil has a legal framework which allowed it to create strategic associations, which is what I'm proposing, a strategic association with the private sector," he added.

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Italy's Berlusconi attacks "Germano-centric" Monti

ROME (Reuters) - Former Italian Prime Minister Silvio Berlusconi accused the technocrat government of Mario Monti on Tuesday of pursuing economic policies dictated by Germany that had dragged Italy into recession.

In remarks that point to a bitter election campaign fought over European issues, Berlusconi said Germany had taken advantage of the financial crisis to lower its own borrowing costs at the expense of other states.

He said Monti's government had been compliant in following a harmful austerity policies set by other European countries.

"The Monti government has followed the Germano-centric policies which Europe has tried to impose on other states and it has created a crisis situation which is much worse than where we were when we were in government," he told his own Canale 5 television.

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Wal-Mart under fire in India, government signals probe

NEW DELHI (Reuters) - India's government said on Tuesday it was prepared to launch an inquiry into lobbying by Wal-Mart Stores Inc. , buckling under an opposition campaign to discredit a flagship economic policy that allows foreign supermarkets to trade in Asia's third largest economy.

Prime Minister Manmohan Singh has pressed ahead with the policy despite fierce political opposition, arguing that foreign capital and expertise is needed to revive the flagging economy and modernize India's food supply chain.

Opposition uproar over the issue has repeatedly caused parliament to be adjourned in recent weeks and derailed efforts to pass more reforms to bring investment to the banking, pensions and insurance industries.

In a recent disclosure filing, Wal-Mart told U.S. authorities it had spent $25 million on lobbying activities in the United States over the past four years to help win market access to markets including India - considered one of the last major frontiers for global retailers.

India's opposition parties, led by the right-wing Bharatiya Janata Party (BJP), have seized on media coverage of the filing as evidence the company had engaged in lobbying in India, even though the filing referred only to lobbying activities in the United States.

"The government views this with as much concern as all sections of the house and has no hesitation in having an inquiry ... to get to the facts of the matter," Parliamentary Affairs Minister Kamal Nath told parliament.

He said he would announce steps towards an inquiry in parliament later on Tuesday. But later his office strongly denied he had given a date for any action, raising questions about whether the government would indeed launch an investigation.

Wal-Mart, which discloses issues and expenditures associated with lobbying in various markets on a quarterly basis in the United States, said the allegations it had lobbied in India were "entirely false".

"The expenditures are a compilation of expenses associated with staff, association dues, consultants, and contributions spent in the United States," a spokesman for the company's local tie-up Bharti Walmart said.

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World stocks wane as US budget talks drag on

BANGKOK (AP) — World stock markets lost some steam Tuesday as efforts by U.S. leaders to reach a budget deal before the year's end appeared deadlocked and fears lingered that a leadership change in Italy could derail Europe's efforts to tackle its financial crisis.

Markets in Asia appeared to take in stride news that HSBC, the British banking giant, will pay $1.9 billion to settle a money-laundering probe by federal and state authorities in the United States. HSBC shares rose 0.3 percent in Hong Kong and fell 0.3 percent in London.

Britain's FTSE 100 fell 0.2 percent to 5,910.52. Germany's DAX rose 0.2 percent to 7,542.72. The CAC-40 in Paris rose 0.1 percent to 3,616.35.

Wall Street futures were sluggish ahead of the opening bell in New York. Dow Jones industrial futures fell marginally to 13,181 and S&P 500 futures shed 0.1 percent to 1,418.80.

Jackson Wong, vice president at Tanrich Securities in Hong Kong, said investors were prepared for the bad news on HSBC after rumors of a settlement leaked out Friday. Helping to calm nerves was HSBC's sale last Wednesday of its 15.6 percent stake in China's Ping An Insurance to a Thai conglomerate for about $9.4 billion.

Japan's Nikkei 225 index fell 0.1 percent to 9,525.32, with Japanese utilities coming under pressure a day after a team of geologists said that a nuclear power plant in western Japan is likely located on an active fault. Japanese guidelines prohibit nuclear facilities above active faults.

Tokyo Electric Power Co. fell 1.4 percent and Kansai Electric Power Co. tumbled 4.4 percent.

Hong Kong's Hang Seng rose 0.2 percent to 22,323.94 and South Korea's Kospi added 0.4 percent to 1,964.62. Australia's S&P/ASX 200 gained 0.4 percent to 4,576. Benchmarks in Singapore and Indonesia also rose while New Zealand, India and mainland China fell.

Investors got a slight jolt after Italian Prime Minister Mario Monti, who has been credited with restoring confidence in Italy's economy, announced he will resign by year's end. Monti said over the weekend that he found it impossible to lead after former Prime Minister Silvio Berlusconi's party, Parliament's largest, dropped its support for the government.

Analysts fear Monti's unexpected resignation could spark a new round of Italian political turmoil and slow efforts to get one of Europe's largest economies back in shape.

Anxiety was also growing as talks drag on between President Barack Obama and Republican lawmakers over a way to avoid the "fiscal cliff," a series of tax hikes and spending cuts that will come into effect Jan. 1 if no agreement is in place to cut the budget deficit.

Benchmark oil for January delivery was up 11 cents to $85.66 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 37 cents to finish at $85.56 per barrel on the Nymex on Friday.

In currencies, the euro rose to $1.2947 from $1.2938 in New York on Monday. The dollar rose slightly to 82.35 yen from 82.33 yen.

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