Loading ...Last week, the market sold off due to uncertainty by our politicians. On Monday’s session, the major averages start the week with sell pressure. Stocks spent the first half of the session in a controlled decline, but managed to regain a portion of their losses after lunch. Washington inability to progress in budget negotiations contributed to the decline. Only Apple had a good, it finished the day 23.23 higher on news that it had sold over 9 million iPhone 5 in the opening weekend. It’s a shame that those 9 million phones sell at a better than going out of business price of 70% OFF.
On Tuesday, the S&P 500 registered its fourth consecutive loss. The selloff was broad base; both stocks and commodities were down. In the early hours, stocks slipped in reaction to a below-consensus consumer confidence report for September. The premarket gains were unable to overcome pessimism in the labor market. The financial sector was beaten like a red headed step child for a second consecutive day with JP Morgan Chase receiving most of the bruising. JPM fell 2.2% after The New York Times exposed that the Department of Housing and Urban Development wanted a $20 billion settlement from their participation in the housing collapse. The only positive news to come out on Tuesday was that the US has at least one politician who can read a book.
Wednesday the markets just extended its losing streak to five consecutive sessions. The five consecutive losses however were relatively small and without conviction because the market is wedged between two massive forces. Investors did not want to be long the market because of a potential government shutdown. At the same time, investors did not want to short the market because of QE. Only God’s chosen Lloyd Blankfein had conviction. He proclaimed how banker’s bonuses were not only deserved, but was what made Goldman Sachs survive the 2008 financial meltdown. The people proclaimed how Goldman Sachs participation (and “shitty” deals) was what caused the financial collapse.
On Thursday, the market snapped its five day losing streak. The donkey show in Washington became unbearable to watch. The House was firm on not passing a budget bill unless it defunds the affordability act (Obamacare). The Senate was firm on a bill that does not include defunding the affordability act. The bullishness was with low volume and even lower conviction.
By Friday, the only news that mattered was the Special Olympics event in Washington. Equities ended the week lower due to the shenanigans in Washington. The Senate passed a bill that funded both the government and Obamacare. The House however has made it clear that it would not pass a bill that included Obamacare.
This Monday, we are starting with significant sell pressure. We may have fireworks this week due to many potential market moving events. We have a government shutdown, a debt ceiling debate, angry Saudis, angry Israelis, and Italy’s government collapsing.
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