NEW YORK ( TheStreet) -- Stock futures were pointing to a stronger open on Wall Street Tuesday amid growing anticipation that a deal to avert the "fiscal cliff" will be achieved and ahead of data that's expected to offer more signs of improvement in the housing market.
Expectations for a budget resolution continued to build as President Barack Obama on Monday night approached the Republicans with a counter-offer that included substantially lowering his demand for higher taxes on wealthy Americans.
Obama proposed to increase taxes on American households with incomes exceeding $400,000; the president previously had demanded raising taxes on households with incomes above $250,000.
House Speaker Boehner and House Majority Leader Eric Cantor on Tuesday are expected to provide House Republicans with the latest on the talks.The S&P 500 was poised to reach a fresh eight-week high Tuesday on hopes for a deal. Futures for the Dow Jones Industrial Average were rising 25 points, or 48.61 points above fair value, to 13,209. Futures for the S&P 500 were up 3.75 points, or 7.09 above fair value, at 1430. Futures for the Nasdaq were rising 15.5 points, or 19.04 points above fair value, at 2677. "U.S. fiscal cliff negotiations are continuing to move towards their conclusion. Why are we waiting? Why, indeed," remarked Paul Donovan, global economist at UBS. "Boehner and Obama met again yesterday. Perhaps more importantly, Senate leader Harry Reid threatened to call the Senate back to work on 26 December. That should get things moving." Major U.S. equity averages heated up Monday as investors cheered signs that Washington officials were making noteworthy progress in their efforts to try to reach a budget deal. The Commerce Department reported Tuesday a third-quarter current account deficit of $107.5 billion, compared with a deficit of $118.1 billion in the second quarter, which was revised from $117.4 billion. Economists, on average, were expecting a third-quarter current account deficit of $103.4 billion. At 10 a.m., the National Association of Home Builders is predicted to say that its Housing Market Index showed that homebuilder confidence in December ticked up to 47 from 46, pushing closer to the 50 mark, the point at which an equal number of builders view sales conditions as good versus poor. Michael PeQueen, managing director and partner at HighTower, said that while he is closely watching several fundamental improvements in the U.S. economy such as the nascent housing recovery and recent employment gains, the single biggest driver of risk appetite in 2013 will be the extraordinarily accommodative monetary policy of global central banks. PeQueen pointed to the Federal Reserve engaging in "QE-infinity;" the European Central Bank giving ECB President Mario Draghi the votes to lower rates; and Japan just electing with a super-majority the Liberal Democratic Party that campaigned on a policy of aggressively expanding the monetary base to fight deflation. "The world will continue to be awash in a sea of liquidity and the rising tide will continue to lift all boats. As a result, we are constructive on stocks worldwide, with an eye on emerging markets," PeQueen said. "At the same time, we continue to shorten the duration of our bond portfolios after having feasted on above-average returns for the past several years." Overseas markets were mostly in the green amid the growing optimism on a U.S. budget agreement. The FTSE 100 in London was up 0.3% and the DAX in Germany was higher by 0.41% on Tuesday. Hong Kong's Hang Seng index closed down by 0.08% and the Japan's Nikkei average finished up 0.96%. Gold for February delivery was up 40 cents at $1,698.60 an ounce at the Comex division of the New York Mercantile Exchange, while January crude oil contracts were up 53 cents at $88.20 a barrel. The benchmark 10-year Treasury was up 2/32, pushing the yield lower to 1.772%. The dollar was down 0.13%, according to the
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