Market Analysis

Stocks are responding positively and bonds slightly worse in response to an agreement by 23 of the 27 European Union members to an intergovernmental treaty to enforce stricter fiscal and financial discipline.  England, the Czech Republic, Sweden and Hungary did not sign on.  These countries are also not part of the Eurozone - those countries who share the Euro.  Investors are viewing 23 affirmative votes, particularly all members of the Eurozone, as a sign that there is political will to keep the European Union intact.  Also, Mario Draghi, the European Central Bank president, signalled his approval of the deal.  Investors are looking for the ECB to move more aggressively in eurozone bond markets, possibly issuing their own bonds to help provide aid to Spain and Italy who are seeing their borrowing rates spike.

In the US, the October Trade Deficit came in slightly lower than expected and the December Univ of Michigan Consumer Sentiment Index came in 67.7 which was better than the 65.1 the market had expected.