Congratulations U.S.A., Things Look Normal Again
NEW YORK (TheStreet) -- The strangest thing happened the past seven days: the U.S. returned to normal.
The House of Representatives, controlled by a Republican Party that has in recent years rejected a vast number of Democrat-sponsored bills, approved a bi-partisan budget proposal crafted by a Senate Democrat and a former GOP Vice-Presidential nominee. That's almost historic in this age of partisan posturing.
Republicans apparent willingness to agree to a compromise, a veritable Washington deal-cutting, has the makings of a seismic shift in the otherwise dysfunctional GOP. The shaking of hands between erstwhile enemies prompted Jon Stewart to exclaim "Deal? Deal? What type of witchcraft is this?"
Last Friday, the Bureau of Labor Statistics released what many economists and analysts were calling one of the most promising labor reports since the 2008 financial crisis, and the markets jumped on the news instead of falling on worries that the Federal Reserve will scale back its stimulus program.TheStreet's Jim Cramer called that November nonfarm payrolls report "perfect," adding that the topline number wasn't running ahead of itself and that the details showed strong fundamentals. Mike Serio, regional chief investment officer for Wells Fargo Private Bank, went so far as to call it a "paradigm shift" for stock markets to begin moving on fundamentals instead of Fed intervention. On Friday, the Commerce Department said November retail sales rose more than expected, despite a weak Black Friday weekend -- traditionally the biggest shopping weekend of the year. The only worry right now may be whether the S&P 500 can stem its December losses so as to finish up more than 25% on the year. And even that isn't worrying some analysts, who say, historically, the so-called Santa Claus rally begins next week. "Most of the professionals are looking for that Santa Claus rally," Chris Bouffard, chief investment officer at The Mutual Fund Store, said in a phone interview. "So many of them are expecting a melt up into the end of the year." Congress is working together, markets are rising on good economic data and consumers are spending more than economists had forecast. Maybe Americans can take a deep breath and realize, things are actually getting back to normal. -- Written by Joe Deaux in New York. >Contact by Email. Follow @JoeDeaux
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