The government shutdown is over, the debt ceiling has been delayed, and the S&P is at an all-time high.
First, the scoreboard:
- Dow: 15,371.6, -2.1, -0.0%
- S&P 500: 1,733.1, +11.6, +0.6%
- NASDAQ: 3,863.1, +23.7, +0.6%
And now the top stories:
- Late Wednesday evening, President Obama signed into law an agreement to raise the debt ceiling and reopen the government. Initially it appeared the news had been priced into the markets. But after opening in the red, the stock markets rallied and the S&P 500 actually hit an all-time record high.
- “We have likely avoided a default, a binary outcome that posed great risk to our thesis (even if the likelihood of a negative outcome was small, in our view),” said JP Morgan’s Tom Lee. Lee believes the path is clear for the S&P 500 to head to 1,775.
- “The latest agreement though, only punts an immediate risk to a few short months away and thus should not give rise to much optimism,” warned Citi’s Tobias Levkovich who sees the S&P 500 ending the year at 1,750. “Investors typically do not like uncertainty and it is hard to determine how these recent almost non-decisions can be seen as reinvigorating confidence aside from some relief that an imminent likely disaster has been avoided. Nonetheless, one cannot respectably believe that things truly have turned for the better as opposed to averting the worst.”
- The Dow Jones Industrial Average, however, lagged. This was completely due to sharp sell-offs in IBM and Goldman Sachs, two of the three largest components of the Dow. Both companies had announced quarterly financial results that disappointed investors.
- The Philly Fed’s manufacturing index fell to 19.8 in October from 22.3 a month ago. However, this was much stronger than the 15.0 expected by economist. The forward outlook sub-index climbed to 60.8 in October, the highest level since September 2003.
- Search giant Google and burrito giant Chipotle announce Q3 financial results after the closing bell.
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