The Senate has a deal and now markets are holding their breath waiting to see if the House will pass it and the US Government can reopen.
When that happens – yes, I’m being optimistic – the pre-conditions are there for new all-time highs across the globes stock markets’. (Don’t forget the DAX in Frankfurt made a new all-time high this week.) Why this is so when increasingly more and more reports are that stocks in the US are “fully priced” can be seen in the charts below from the IMF of global central bank liquidity.
Rates in the developed world remain super low and, in the orange box at bottom left, central bank balance sheets – especially the US Fed – in the developed world are still going.
That money is supporting Stocks and a resolution of the US debt crisis with this eleventh-hour deal in the Senate could propel the S&P 500 back up to its all-time highs. Some market technicians I talk to reckon if 1727 gives way it could run 100 points.
The Aussie Dollar is likely to go along for the rise as will the ASX.