Courtesy of John Nyaradi.
Stock markets will likely decline on Monday due to an impending US Government Shutdown
It is Sunday evening, 10:45 PM EST and I believe that stock markets will become a total complete bloodbath Monday morning. We left stock markets last Friday with a .46% decline for the S&P 500 (NYSEARCA:SPY), a .46% decline for the Dow Jones Industrial Average, and a .15% decline for the NASDAQ 100 (NASDAQ:QQQ). We also left stock markets last Friday with an obtuse Congress that still has yet to pass a bill which will keep the US Government open past Monday, September 30th.
The bigger issue, notwithstanding the fact that over 800,000 US Government employees will not be able return to work on Tuesday if Congress fails, is the impending debt ceiling debate that must be resolved by October 17th. But for Monday, September 30th, I think the political gridlock will continue to bleed out stock markets until a resolution is made (if one is made at all). If Congress fails to act by Midnight tomorrow night, I think we can count on more stock market blood on Tuesday too.
World markets are not too happy either, as evidenced by both Asian and European futures markets trading in the deep red at time of this writing. Additionally, we are due for a Chicago Fed National Index report and a Markit Flash PMI report tomorrow, which could add to the doom and gloom, but not likely. All eyes appear to be on Congress for now.
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