Capitol Hill chaos and a big game of chicken will keep the markets jittery. The government is on the verge of another shutdown, or at least a partial one on October 1 if there is no action imminently, while Treasury Secretary Yellen has indicated October 18 as the drop dead date on the debt limit and a default.
Equity futures are higher ahead of the open, though off their best levels. Contracts on the major indices are up 0.25% to 0.5%. The modest bounce from Tuesday’s rout comes as the yield on the 10-year Treasury note eased slightly from the multi-month highs seen yesterday. Rate-sensitive big tech shares were hammered lower in the Tuesday session, though appear to be the beneficiaries of dip buying ahead of the open. Issues remain for the market however, aside from the usual suspects of growth and Covid concerns, inflation, and high valuations, investors are now grappling with the odds of a government shutdown, and the potential for a default.
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Andria Pichidi
Market Analyst
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