With D.C. Out of the Way, Investors Focus on More Important Matters
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Despite some carnage in a couple of Dow stocks on disappointing earnings, broadly stocks are higher as represented by the S&P 500 which is trading at new record levels - last up 7.97 to 1,729.57.
With the three ring circus over for now in Washington D.C., investors can focus on other matters - namely continued quantitative easing by the Federal Reserve, at least through the end of this year.
While it is difficult to calculate the exact impact of the government shutdown, S&P put a figure of $24 billion, or $1.5 billion per day, on the impasse. They believe the shutdown may have shaved at least 0.6% off of annualized fourth-quarter 2013 GDP growth.
S&P also warned that with the resolution only a temporary one, with an early 2014 timeframe for the next set of Washington deadlines, "the short turnaround for politicians to negotiate some sort of lasting deal will likely weigh on consumer confidence, especially among government workers that were furloughed." They added, "If people are afraid that the government policy brinkmanship will resurface again, and with it the risk of another shutdown or worse, they'll remain afraid to open up their checkbooks. That points to another Humbug holiday season."
U.S. annualized growth in the fourth quarter was seen at 3% as recently as September at S&P. This has now been lowered to closer to 2%. "The bottom line is the government shutdown has hurt the U.S. economy," they said.
Still, as being witnessed today, with DC in the rear view mirror and the Fed still in easy money mode the only thing to do is 'buy the dip', or 'BTFD' in trading circles.
With the three ring circus over for now in Washington D.C., investors can focus on other matters - namely continued quantitative easing by the Federal Reserve, at least through the end of this year.
While it is difficult to calculate the exact impact of the government shutdown, S&P put a figure of $24 billion, or $1.5 billion per day, on the impasse. They believe the shutdown may have shaved at least 0.6% off of annualized fourth-quarter 2013 GDP growth.
S&P also warned that with the resolution only a temporary one, with an early 2014 timeframe for the next set of Washington deadlines, "the short turnaround for politicians to negotiate some sort of lasting deal will likely weigh on consumer confidence, especially among government workers that were furloughed." They added, "If people are afraid that the government policy brinkmanship will resurface again, and with it the risk of another shutdown or worse, they'll remain afraid to open up their checkbooks. That points to another Humbug holiday season."
U.S. annualized growth in the fourth quarter was seen at 3% as recently as September at S&P. This has now been lowered to closer to 2%. "The bottom line is the government shutdown has hurt the U.S. economy," they said.
Still, as being witnessed today, with DC in the rear view mirror and the Fed still in easy money mode the only thing to do is 'buy the dip', or 'BTFD' in trading circles.
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