SOURCE: Paragon Financial Limited

Paragon Financial Limited

November 27, 2012 08:20 ET

Consumer Spending Could Drop by as Much as $200 Billion if Upcoming "Fiscal Cliff" Is Not Avoided

The Paragon Report Provides Stock Research on The Coca-Cola and Mondelez International

NEW YORK, NY--(Marketwire - Nov 27, 2012) - U.S. markets slumped Monday as White House economists warned the uncertainty of tax hikes, a result of the upcoming "fiscal cliff," for middle class taxpayers could cause a steep drop in consumer spending in 2013. On Monday, 9 of the 10 groups in the S&P Index fell. The Paragon Report examines investing opportunities in the S&P 500 Index and provides equity research on The Coca-Cola Company (NYSE: KO) and Mondelez International Inc. (NASDAQ: MDLZ).

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According to a study by President Barack Obama's National Economic Council and his Council of Economic Advisers a sudden tax increase for middle-income taxpayers could see consumer spending drop by nearly $200 billion next year. Data from the study showed a typical family of four (a married couple with two children) earning between $50,000 and $85,000 would pay an extra $2,200 in taxes. The Congressional Budget Office has recently stated that if the U.S. is unable to avoid the fiscal cliff it could face a recession and see the unemployment rate rise to roughly 9 percent.

"There's the backdrop of what's going on in the European Union with the bailouts and recapitalizing the banks. On top of that, we have issues in the U.S. with regard to our fiscal policy. That's just enough reason at this point in time to take risk off the table and wait for more insight and clarity," said Peter Sorrentino of Huntington Asset Advisors.

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The Coca-Cola Company currently offers investors an annual dividend of $1.02 per share for a yield of approximately 2.75 percent. The company has announced plans to invest $1.3 billion in Chile from 2012 to 2016, which includes the $200 million spent on its recently opened Coca-Cola Andina bottling plant in Renca.

Mondelez International is the global snacking and food brands of the former Kraft Foods Inc. following the spin-off of its North American grocery operations in October 2012. Mondelez International has annual revenue of approximately $36 billion and operations in more than 80 countries. The company expects 2013 Organic Net Revenue growth to range from 5 percent to 7 percent.

The Paragon Report has not been compensated by any of the above-mentioned publicly traded companies. Paragon Report is compensated by other third party organizations for advertising services. We act as an independent research portal and are aware that all investment entails inherent risks. Please view the full disclaimer at: