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CRUNCH TIME - By David Urani

Here we go, there are a few days left before year end and Congress is back in session. Word has it there were no negotiations over the break so they're really going to have to hit the ground running. Today, it's up to the Senate to try to craft their own version of a deal that hopefully would be sufficient to pass in the House as well.

By the way, the Treasury notes that we're about to breach the debt ceiling. Secretary Geithner is going to do some accounting tricks that ought to carry us over for another couple of months. Nevertheless, it's a sobering reminder that once the Fiscal Cliff is (or isn't) resolved, this will immediately become an issue. As you may recall, the debt ceiling is a highly contentious issue and was enough of a debacle that it spurred S&P to downgrade US debt. There's a chance that a debt ceiling extension finds its way into a Fiscal Cliff deal, however.

And speaking of downgrades, Fitch has already warned lawmakers about lowering the US credit rating. Although you may think that harsh tax increases and spending cuts would improve the country's financial standing and lower the deficit, it's the prospect of government stalemate that has Fitch worried. That was the same view S&P shared when it downgraded the country last year. Not to mention, the fiscal cliff could tip the fragile economy into a decline.

Jobless Claims

Weekly jobless claims data has been looking better of late. The reading for last week showed a decline to 350k from 362k, below the 360k consensus estimate. Even more encouragingly, the four-week average went down to 357k, its lowest level since March 2008. That being said, we can't help but wonder if that past couple of months have been skewed by Hurricane Sandy, Thanksgiving, and now Christmas, as there's typically a bit of a lull this time of year. Let's see if this trend holds up in January.