Wednesday Morning Cheat Sheet: 3 Stories Moving Markets

Morning Cheat Sheet Main Image

Markets were mixed in Asia on Wednesday, with concern over the U.S. fiscal situation contributing to market uncertainty. In Japan, the Nikkei fell for a second day, losing 0.76 percent to close at 14,620.53. In Hong Kong, the Hang Seng edged up 0.13 percent to 23,209.63; in Shanghai, the Composite fell 0.41 percent to 2,198.52. In India, the Mumbai Sensex fell 0.32 percent to 19,856.24. In Australia, the ASX All Ordinaries climbed 0.78 percent to 5,270.10.

European markets declined in midday trading. In the U.K., the FTSE 100 was off 0.28 percent; in Germany, the DAX was off 0.03 percent; in France, the CAC 40 was off 0.27 percent; and the Euronext 100 index was off 0.33 percent.

U.S. markets advanced ahead of the opening bell: DJIA: +0.07%, S&P 500: +0.01%, NASDAQ: +0.13%.

Here are three stories to keep an eye on.

1. Budget Debate

It’s that time of year again: Summer has officially ended, days are getting shorter, and the United States Congress is marching toward yet another budget debate in which the risk of a government shutdown is very real. Congress has until the end of the month to reach a funding agreement — the government is expected to have an annual operating budget of approximately $986 billion this coming fiscal year — or else all nonessential government operations will grind to a halt.

Sen. Ted Cruz (R-Texas) continues to speak on the issue, having begun talking yesterday afternoon. Cruz is speaking in opposition of the Affordable Care Act and is urging the Senate to support a short-term GOP budget that would fund federal operations through December while at the same time defunding Obamacare. The Senate, currently controlled by the Democratic party, is widely expected to strip the defunding measure from the budget.

2. Business Climate Indicators

Business managers surveyed by the National Institute of Statistics and Economic Studies in France reported that the business climate in France continued to improve in September. INSEE’s index climbed from 91 to 94, still below its long-term average of 100, but a marked improvement from 85 in May.

Insee

Source: National Institute of Statistics and Economic Studies

3. Income Inequality Isn’t Going Away in the U.S.

Last week, the U.S. Census Bureau released its annual Income, Poverty, and Health Insurance Coverage in the United States report. The document, which covers 2012, revealed that little progress was made between 2011 and 2012 toward reducing poverty, closing the income gap, or increasing median household income. It also clearly demonstrates the damage that the late-2000s crisis had on the economic well-being of Americans.

Income inequality has increased steadily in the United States, even as the stock market has recovered most of its losses; the Dow Jones Industrial average doubled from the low it hit in March 2009. The housing market has also shown signs of recovery, and with three years of steady increases, the official poverty rate remained flat in 2012 at 15 percent. Yet for an increasing number of working families, economic security is out of reach. Between 2007 and 2011, the share of working families considered low income, meaning their earnings are 200 percent of the official poverty threshold, increased from 28 percent to 32 percent nationally.

Here are some highlights from the report and elsewhere that demonstrate how income inequality in the U.S. remains a huge problem, and how we haven’t necessarily made any improvement in the past few years… (Read more.)

Don’t Miss: Is the Budget Wrangling Making Markets Nervous?