Tuesday, October 15, 2013

Stocks on the rise during the shutdown?

GOP, shutdown. Decline
A trader looking up at a screen on the floor of the New York Stock Exchange. 

The government is on day 15 of the shutdown. All across America federal employees are furloughed and a large number of government institutions are barely running. With so much of the country out of commission and the default deadline looming over congress, why does it appear that the financial sector has not taken notice.

I think the answer here is that no one on wall street truly believes that we will default. The general consensus is that there is no way our politicians would be so selfish and crash the economy in order to win a pissing contest.

The financial sector's confidence is reflected in last weeks markets. Stocks closed high on Friday under hopes of discussion and a deal. The Dow Jones rose 64 points or 0.4% to 15301 after being down 100 points. The S&P rose 7 points also 0.4% to 1710 and the NASDAQ gained 23 points a 0.6% gain to 3815.

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