PrimeRates Market Talk: No Data, No Problem

Written by: Jack Boylan

With the shutdown continuing, the markets keep taking things in stride. Maybe we should have the government shut down more often! Today will be another day with no economic numbers, at least from the government, and the futures are pointing higher. With just a hint of good news, namely that the debt ceiling may be raised for about 6 weeks, the markets took the opportunity to show where they stand on the issue. To no one’s surprise, they like debt and the more the better. To be fair, the official analysts position is a bit more nuanced if rather incoherent. The consensus seems to be that the fire hose of money printing and gargantuan debts is good for the short term. On the medium and long term consequences, there is a concerted effort to not talk about that.

But hey, nobody is surprised that Wall Street cares much more about their present day profits than the long term health of the country. And I guess that is to be expected, but that doesn’t mean that investors shouldn’t be cautious. The debt ceiling and other Washington shenanigans are interesting (uh, sort of) but, as always it is important to not get swept up in emotions. The markets surged on Thursday with a tissue paper of an excuse. That could certainly be a sign of good things to come, but it may also be nothing. After all, have the fundamentals of the economy really changed these last few days? Even JP Morgan, one of those aforementioned Wall Street types, appears a bit  wary of the big move:

Rallies like the cork-popping champagne shower that drenched us Thursday really put the whole buy-and-hold approach to the test.

For those prone to watching the day-to-day, it’s got to be hard to resist the exit that a 323-point move on the Dow offers during tenuous times like these. Giving into that urge might not be the worst thing at this point, according to Mebane Faber…

If you are enjoying the Washington drama there should be plenty more on the plate. For those that are already tired of it, the good news is the weekend is here in a matter of hours. Some earnings and a consumer sentiment (private sector) report are due today, so there will be some non-political news to chew on. Next week may get us all back to “normal” as far as market information goes. Whether to consider that good news or bad, I will leave it up to you. In the meantime, have a great weekend!


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PrimeRates Market Talk: No Data, No Problem

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