Markets response to the U.S. Government shutdown!

What happened with the U.S. Government?! Shit they shutdown… 🙂

Recent concerns regarding U.S. fiscal future were proven justified on Tuesday.

 

Markets response to the U.S. Government shutdown!

Markets response to the U.S. Government shutdown!

 

Concerns were about Republicans and Democrats failure-to-reach a compromise over the budget, and President Barack Obama lack of desire to discuss postponing the Affordable Care Act he endorses.

Consequently, the U.S. Government started shutting down agencies and sending 800,000 federal employees to an unpaid leave.

Many Government services are shut down while Congress tries reaching an agreement over the budged.
The uncertainly led equity markets to trade quite low early on the week.

Fear in the equity markets quickly gave way to hope that the U.S. economy is actually better off with a downsized public sector, or at least that the shutdown in itself encompasses no immediate risk.

Evidently, perhaps to the dismay of the Fed itself, the S&P 500 started trading nearly 0.5% higher in the middle of Tuesday’s trading.
Attempts to reach the agreement between President Obama and Congressional Republicans continued on Wednesday.

Nonetheless, it seems that the Republicans had little chances to succeed as President Obama said he would not negotiate major budget issues until the Government is re-opened and the debt ceiling is increased.

“The president remains hopeful that common sense will prevail, and that Congress will not only do its job to reopen the Government, but also act to pay the bills it has racked up and spare the nation from a devastating default“, said a statement issued by the White House, binding the passing of the budget with raising the debt ceiling.

 

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