Thursday, October 23, 2014

Understand It: Markets Celebrate A Government Shutdown With A Rally

The stock markets apparently welcome a government shutdown. The stock market is in rally mode on the first day the U.S. government has been shut down. The SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is trading at $169.26, +1.16 (0.69%).

So could the market actually welcome a shutdown? I think it is more complex than that. The market is analyzing the Debt Ceiling fight which is on the horizon. The feelings are that the government shutdown and Debt Ceiling fights are being rolled into one. For President Obama to get his way on the Affordable Care Act (ObamaCare), he will have to allow the Republicans to cut some more spending to allow the Debt Ceiling to be raised. I know it seems warped, but the market is looking at the bigger picture and is liking what it sees.

Gareth Soloway
InTheMoneyStocks.com



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