The markets didn’t move much. But trouble may be brewing as the U.S. inches closer to its debt ceiling.
First the scoreboard:
Dow: 13,507, +18.8, +0.1 per cent
S&P 500: 1,470, -1.3, -0.0 per cent
NASDAQ: 3,117, -8.1, -0.2 per cent
And now the top stories:
- This is the second trading session where stocks basically went nowhere. But no one’s complaining considering the fact that stocks currently sit near their five-year high. However, Vitaliy Katsenelson of Contrarian Edge, notes that stocks are flat since 2000. And he recently gave a big presentation arguing that stocks could go sideways for another decade.
- Meanwhile, Washington continues to wrestle over a deal that would address the debt ceiling. “If Congressional Republicans refuse to pay America’s bills on time, Social Security checks, veterans benefits will be delayed,” Obama said during a press conference today. Check out this painting that describes what would happen if the U.S. defaults on its debt.
- So, what’s with the complacency in the markets? “A key investment lesson of the last five years is that politicians eventually reach a compromise although markets may suffer in the interim,” wrote Goldman Sachs’ David Kostin in a note to clients this week. “Investors have become accustomed to midnight negotiations in order to avoid one dire fate after another. Accordingly, downside may be limited this time.”
- Meanwhile, computer giant Dell is reportedly in talks to be bought out in a private equity deal. The stock jumped 13 per cent on the rumour.
- Shares of Apple fell by over 3 per cent on a Wall Street Journal report that the tech giant was cutting orders for iPhone parts.
- Don’t Miss: The True Story Of The Time JP Morgan Saved America From Default By Using An Obscure Coin Loophole >
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