Market Digest \u2013 Week Ending 11\/30\r\n\r\nFiscal Cliff negotiations went sideways, but stocks rose anyway as investors gained confidence at least a partial solution will be reached this year. US GDP for the third quarter was revised upward to a respectable 2.7%. Meanwhile, the German Parliament overwhelmingly approved a new aid package for Greece, paving the way for a 44 billion Euro tranche that should keep Greece in the Euro for at least a couple of years. Treasuries were flat. Gold fell.\r\n\r\nWeekly Returns\r\n\r\nS&P 500: 1,416 (+0.5%)\r\n\r\nMSCI EAFE: (+1.0%)\r\n\r\nUS 10 Year Treasury Yield: 1.62% (-0.07%)\r\n\r\nGold: $1,715 (-2.0%)\r\n\r\nUSD\/EUR: $1.301 (+0.3%)\r\n\r\nMajor Events\r\n\r\n \tMonday \u2013 Egyptian President Mohammed Morsi attempted to calm the reaction to last week\u2019s move to bestow nearly absolute power upon himself by saying the moves are temporary.\r\n \tTuesday \u2013 Finance ministers from the Eurozone agreed to a deal with the IMF to cut Greece\u2019s debt levels and to provide additional aid.\r\n \tWednesday \u2013 Stocks rose after Speaker of the House Boehner said he is optimistic lawmakers can \u201cavert this crisis sooner rather than later\u201d, in reference to the Fiscal Cliff.\r\n \tThursday \u2013 Q3 US GDP was revised up to 2.7% from 2.0%. The revision fell short of consensus estimates of 2.8%.\r\n \tThursday \u2013 President Obama made an opening bid for a Fiscal Cliff resolution, offering a $1.6 trillion tax increase, $400 billion in spending cuts and proposed granting the President power to lift the debt ceiling. Republicans dismissed the proposal as a step backwards.\r\n \tFriday \u2013 Boehner said Fiscal Cliff talks have reached a \u201cstalemate\u201d, while Obama said there would be \u201cprolonged negotiations\u201d.\r\n \tFriday \u2013 German Parliament overwhelmingly approved the deal to provide more aid to Greece.\r\n\r\nOur Take\r\n\r\nAs expected, little progress was made on the Fiscal Cliff this week. Both sides will maximize their leverage by waiting until closer to New Year\u2019s before issuing anything more than rhetoric. There is no way to know what the final agreement will look like or whether it will be signed in 2012 or early 2013, but it is nearly certain that income tax rates on all but the highest earners will be kept at current rates. This is the issue voters care most about, and it is one where Republicans and Democrats agree.\r\n\r\nThis should remove the biggest bite from the Fiscal Cliff. Markets have realized this as well, which is likely why stocks rose this week in spite of a lack of any tangible progress.\r\n\r\nNews out of Europe was bullish, at least for the short-term. The agreement to provide additional aid to Greece is important. The most likely scenario is Greece will get the support it needs to buy a few years of time to solve its problems. Beyond that, however, we are doubtful Greece will be able to return to unsupported solvency within the Eurozone. Therefore, additional aid may do little more than prolong the issue and prove to be a waste of money, but it should remove a major source of volatility over the next year or so.