Global markets edged closer to the cliff today as the debt stalemate continued and economic data was miserable.
At Wall Street Sector Selector, we had a nice day as our inverse ETF, put option and cash positions served us well during today’s nasty sell off.
However, it was a tough day for investors around the world as another day ticked by without a resolution to the debt ceiling debate.
Competing proposals are moving through Congress and tomorrow a vote is supposed to come on House Speaker Boehner’s plan which most analysts think has no chance of passing in the Senate.
A second proposal from Senator Harry Reid apparently came up short on projected savings and so both sides appear to be sorely in need of sharper pencils to get to the needed level of debt reduction.
June Durable Goods came in at a dismal -2.1% compared to a +2.1% for the previous month and the Fed Beige Book report showed slowing activity in a majority of the 12 Fed regions. So, the notion of a temporary soft patch now seems to indicate that the soft patch is growing larger by the day.
An increasing number of analysts now forecast that the U.S credit rating may be downgraded no matter what happens this week and that can only be expensive for the nation’s economy in terms of higher interest rates and economic uncertainty.
Tomorrow is Thursday and another day closer to August 2nd.
Dow Jones Industrials (DIA): -198; -1.6%
S&P 500 (SPY): -27; -2.0%
NASDAQ 100 (QQQ) -62; -2.6%
Russell 2000 (IWM): -24.3; -2.9%
New and Continuing Unemployment Claims
June Pending Home Sales
Have a great evening,
Disclaimer: Wall Street Sector Selector actively trades a wide range of exchange traded funds (ETFs) and positions can change at any time.