![]() Almost all of that decline came in three weeks at the height of the summer, when both Standard & Poor's and Moody's Investors Service reviewed the U.S. That year, the "S & P 500 peaked on the final trading day of April and fell 19.4% to its final low on October 3," according to Jeff Hirsch, editor of the Stock Trader's Almanac. By some lights, the stock slump surrounding the debt limit crisis in 2011 was even worse than that. "Equities sold off both into the resolution and continued to sell off an additional 12% in the two months following resolution," Lentini said. The episode that worries Wall Street most occurred in 2011, when the markets were already shaky, as they are today. equity strategist at Morgan Stanley, recently noted. Similar impasses in 19 came in the midst of bull markets and were followed by renewed rallies, Nick Lentini, U.S. Bill Blain, market strategist at Shard Capital, also in London, assumes that "at some point something will break" in the debt talks, "and after a bit of noise there will be an agreement leaving everyone still angry and annoyed, and the spikes in rates will mellow – but confidence will be cracked." Worrying 2011 precedent Recent history tells investors that stocks will move more violently during a debt ceiling standoff. debt ceiling and renewed financial stability concerns," wrote Christian Mueller-Glissmann, Goldman's head of asset allocation research in London. ![]() Unfortunately, that only increases "the vulnerability to shocks near term, including the U.S. economic growth has held up and first-quarter corporate profits were solid. Goldman Sachs figures that expectations of future stock market volatility have dropped because bond yields have declined in 2023, helping tech stock valuations, U.S. The bad news is that complacency is nigh in the stock market, as shown by the CBOE Market Volatility Index (the VIX) trading below 18 on Friday, and having fallen almost 22% in 2023. Just further talks between White House and Congressional staffers, leading to another meeting between President Joe Biden and Congressional leaders before Biden leaves next Wednesday for a G-7 summit in Tokyo. ![]() Good news for markets next week: no default, no credit agency downgrade, no apocalypse. Washington can hardly agree on anything, but the consensus everywhere is that the "X date," when the Treasury can no longer pay the government's bills unless the debt ceiling is raised, won't arrive any earlier than June 1 - and maybe not for weeks after. Personal Loans for 670 Credit Score or Lower ![]() Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit ![]()
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