Daily Market Recap
The S&P 500 was lower by 0.60% and the Dow was off 0.84%. Based on the futures action over the weekend the pullback today was quite mild. The market hit its lows in the first few hours of trading and closed well of the day’s lows.
The mood on trading desks was that rather than the market needing a further significant pullback to account for Washington’s dysfunction, the market would be higher if DC wasn’t the lead story.
It appears that there will not be a resolution reached tonight and there will be a shutdown.
The talk on desks was that a 1-4 day shutdown would allow for the two parties to come up with resolutions that last more than just a few weeks. The only chance of there not being a shutdown is if Boehner calls for a vote, which doesn't seem likely.
It doesn’t appear that the market is being overly complacent to the issues in Washington, but that investors are looking past the congressional theatrics and see compromise that will include a debt ceiling arrangement and medical device tax repeal.
Strong sectors were consumer discretionary, health care, materials, and technology. Weakness was seen in consumer staples, energy, financials, and telecom services.
Source: PFS Group
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