(As of 7:19 am PST)
Political drama continued in Washington over the weekend
as lawmakers grappled over the US government shutdown and debt ceiling
crisis. Stocks are getting pummeled to
start this morning, with the Dow off 125 points and the Nasdaq and S&P500
inching toward 1% losses. Suspense
picked up over the weekend as House Speaker John Boehner pushed for broader
talks on the federal deficit before bringing up new bills that would reopen the
government and increase the debt limit.
The standoff has pushed into its second week with the shutdown going on
its 7th consecutive day. The
deadline for hitting the debt limit is just 10 days away. If members of Congress cannot agree to a deal
to raise the debt limit, the US will default on its debt for the first time in
history. Shutdown fears and talks of
default are impacting global markets as well as the US. Asian markets were lower early today while
Europe also is seeing broad market losses.
Gold is providing some support (up 1%) as the ‘taper talk’ has played
second fiddle for most of the last 2 weeks.
Economists are now saying the taper (the Fed’s slowing of bond
purchases) may not come until December or even early next year. Interest rates and the US dollar are slightly
lower. Expect market volatility to stick
around or increase the next two weeks or until an agreement is reached.
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