Salient to Investors:

David Sowerby at Loomis Sayles it’s a tug of war between the fiscal cliff and global monetary easing – most bullish is valuation and an accommodative Fed.

The average analyst expects capital spending by S&P 500 companies to drop 1.3 percent in 2013 after 3 years of growth. Bears say the last decline was at the end of 2008, just before stocks slumped to a 12-year low, and expect CEO pessimism to sap the rally. Bulls say any decline will be limited and believe the improving U.S. economy will lift equity valuations that are 12 percent below the 58-year average. The S&P 500 is at 14.5 times reported earnings versus 16.4 average since 1954.

Abi Oladimeji at Thomas Miller Investment said the danger of policy errors could undermine equity markets and the broader economy.

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