We first posted this after the close on Monday.
Today the Dow Industrials were down 7/10%
The Nasdaq and S&P 500 -.56%.
From Real Time Economics:
...Until now, the market reaction to the on-again-off-again negotiations in Washington has been fairly reserved, mostly because the consensus is that neither Democrats nor Republicans want to commit political suicide. But conversations with portfolio managers, strategists and economists suggest many are giving the government until end-of-day Wednesday to show some discernible progress instead of just throw debt-cutting proposals back-and-forth.......Here are a few thoughts from market participants on when and how to pull the trigger:
James Marple, Senior Economist, TD Bank
He says that the market will continue showing “wishful thinking” until the middle of the week, but that’s when investors will realize that if there’s still no agreement between the “power players” in the Senate and the House, there will be much more of a reaction.
Robert Sinche, Global Head of Foreign Exchange Strategy, RBS Securities
If there are no agreements or even notable progress by end-of-day Wednesday, he says, Thursday morning in Asia “could become a lot more unsettling.” And it goes without saying, of course, that if Asia comes undone, European traders will follow the trend and it’ll culminate with wild trading in the U.S....MORE