Market Drivers: Fiscal Cliff, SEC and Retail Sales

Obviously, the headway or lack thereof, in the fiscal cliff debate was a major driver of the markets this week. It seems like the markets have gotten a bit emotional about this one, but given the stakes, it's hard to blame them. On the Street, we would call this “headline driven” trading. Despite the big swings, the market has largely moved sideways, bumping along just below the 13,000 level.

If you happened to drop by any of the Street’s watering holes this week, (I’m partial to Bobby Van’s, myself), here’s some of the chatter you’d likely overhear and my take on the top three things moving markets this week:

Fiscal Cliff Rollercoaster

In the on again, off again deal making, the markets fell or rallied based on sentiment of agreement in Washington. Wednesday saw a 100 point rally in the Dow based on comments from Goldman Sachs CEO Lloyd Blankfein who told reporters after his meeting with the President that he was confident that a deal would get done. Thursday, Speaker Boehner told reporters that Democrats haven’t been taking spending cuts seriously, causing a 40 point drop in the Dow.  Seatbelts may be necessary as this debate wears on.

SEC Turnover

The major news for the markets this week wasn't really news. SEC Chairwoman, Mary Schapiro announced her very well telegraphed decision to step down from the Commission on Monday. What was news, was the fact that the Obama administration immediately named Elisse Walter, a long time colleague of Schapiro as her interim replacement. Walter has served on the commission for the last 4 years and her official term is up at the end of 2013. The president will have until then to nominate an official replacement which will have to be confirmed by Congress. The SEC has a lot on its plate right now, including Dodd Frank implementation and major market structure reform, and it will be interesting to see whether Ms. Walter can have any real impact on regulation as the interim chairperson. Interestingly, she recently dissented on a ruling suggesting she may be more pro-regulation than her predecessor.

Black Fridays and Cyber Mondays

November marks the beginning of the most important time of year for retailers and investors pay close attention to Black Friday, Cyber Monday and, more broadly, Same Store Sales. It's funny how times change. Now that we all shop online as much as we do in actual stores, it’s become harder to decide which is a better gauge of the economy, Black Friday or Cyber Monday. Sales for both days were strong, although there seems to be a slowdown in the size of that growth from last year. Same Store Sales numbers for the month of November came pouring in on Thursday and while they don’t include Cyber Monday sales, were largely disappointing. Retailers are blaming Hurricane Sandy for weaker than expected early November sales (the northeast region alone accounts for 24% of retail sales nationwide), but remain optimistic about the holiday season.

A few additional tidbits:

Knight Capital made headlines this week after electronic trading firms GETCO and Virtu separately made bids to acquire the company. While perhaps not market moving, this is significant news on Wall Street because Knight operates one of the largest market maker operations in the world and accounts for 10% of daily US stock transactions. Whether a deal gets done remains to be seen, but rest assured, trading desks all over the Street are talking about this one.

The big surprise was a huge quarter out of Green Mountain Coffee Roasters. With increased competition and slowing growth reported last quarter, the Street had basically left the stock for dead. As a sometime Vermont resident, I will chalk it up to the fresh mountain air, but whatever it is, GMCR's got something special to keep coming back. Quarterly earnings popped the stock 25% this week.

BOE appoints Canadian Mark Carney to its top job. Mostly interesting because Carney is a foreigner, but he comes with good credentials and most pundits are giving the move the thumbs up.

Put this last bit in the silly bucket, but the 30 Rock Christmas Tree and our own NYSE Christmas Tree both have Twitter handles (really, who doesn’t have a Twitter handle these days?). Leading up to the Rockefeller Center tree lighting last night, the two had quite a Twitter war going over which tree is top dog and it was actually pretty entertaining. Check out the highlights here or follow them yourself @NYXmastree and @20RockTree.