Markets finished the first week of 2013 with a bang, upbeat over resolution surrounding fiscal cliff talks. The S&P 500 closed up 4.6 percent for the week, hitting a high of 1,466 on Friday; a level not seen since December 2007. The other indices also closed up, with the Dow gaining 3.8 percent and the Nasdaq climbing 4.77 percent. Although soon-to-be-released fourth-quarter earnings data could slow things down, a flood of new pension and 401k money has potential to keep the rally going. Only time will tell the story.Though you may be following this already, we feel a responsibility to recap some recent events and their outcomes. The U.S. Senate was finally able to reach a deal with the Whitehouse in the early hours of Jan. 1, after which the House ratified the American Taxpayer Relief Act of 2012. Major provisions of this bill include:• Raise $600 billion in revenue over 10 years through tax increases. • Postpone for two months the start of $1.2 trillion in automatic spending cuts. (Unfortunately, postponing spending cuts just means that we'll be revisiting the issue again soon.)• Permanently extend the Bush Tax Cuts for income below $400,000 per individual, or $450,000 per family. Income above that level would be taxed at the highest rate of 39.6 percent. For earners in the top bracket, capital gains and dividend tax rates would return to 20 percent from 15 percent.• Permanently patch the Alternative Minimum Tax (AMT) and index it to inflation.• Extend unemployment benefits for one year for the long-term unemployed. Although Americans are relieved that the fiscal cliff quagmire is over, a Gallup poll shows that opinions are split over the deal, with 43 percent showing approval, while 45 percent disapprove. There is still much work to be done when it comes to balancing our nation's finances, and this deal barely puts a dent in the budget deficit, but we hope lawmakers will remain committed to formulating lasting solutions.Looking ahead, fourth quarter earnings will kick off this week and American corporations will be under the microscope as analysts try to decide whether fundamentals support further market upside. Headlines• Lenders nearing a deal on foreclosure abuse claims. A $10 billion settlement to resolve claims of foreclosure abuse among major U.S. lenders is expected to be announced this week. The settlement covers abusive practices like flawed paperwork and botched loan modifications and will be split among homeowners who have already lost their houses and those who are in danger of foreclosure. • Hostess Brands may be purchased. Flowers Foods Inc. and Grupo Bimbo SAB are in discussions to acquire pieces of Hostess Brands Inc.'s bread business, as the maker of Wonder Bread and Twinkies sells off assets and liquidates. Hostess, whose brands include Wonder Bread, Nature's Pride, Home Pride, Merita, and Butternut, is still determining how to split up assets and package them for buyers, said people familiar with the talks.• Health insurers are seeking double-digit premium increases. Despite federal regulations seeking to prevent high premium increases, health insurers are seeking to raise premiums, by as much as 22 percent in some cases. Some states have insurance commissions with the ability to strike down rate increases. • U.S. and China leave Europe in the dust. Despite fears of contagion, it appears that the economies of China, the U.S, and much of the developed world have succeeded in decoupling from troubled Europe. According to manufacturing surveys released this week, the U.S. remains in growth territory, while Europe is firmly mired in a recession. Mark Ballenger is an investment and financial planning consultant offering services to individual investors and business owners. His company, Ballenger Asset Management, is located in Avon and can be reached at 970-471-9962. This report has been created with the cooperation of Platinum Advisor Marketing Strategies LLC. Securities offered through Cambridge Investment Research, a broker-dealer, member FINRA/SIPC. Ballenger is an investment adviser representative for Cambridge Investment Research Advisors Inc., a registered investment adviser. Ballenger Asset Management and Cambridge are not affiliated.