Will the Market Recovery Last?
Wednesday brought an end to the government shutdown, and subsequently, Thursday’s stock market made an impressive recovery. “You don’t have to worry about the government anymore, and couple speed bumps are out of the way,” said Dan Greenhaus, the chief global strategist at BTIG — according to CNBC.
The relief is certiainly visible in the latest Dow Jones Industrial Average bump, recovering at $15371.65 from opening with $15,369.46. The S&P 500 continues to float about it all, reaching $1733.1 and topping its September 19 record of $1729.86. The Nasdaq reached a thirteen year high at $3863.15. Finally, the Volatility Index (VIX) — a commonly used barometer market fear — fell to nearly 13 from Wednesday’s 17.21.
While an agreement was made Wednesday in Congress to raise the debt ceiling and refund the government, the agreement was not conclusive, and the president voiced concerns for the countries economic future. According to CNBC, he’s not the only one looking ahead. Jack Lew, Treasury Secretary, said that while he welcomed the bright side coming from the Market, there will likely be more hurdles to getting the country’s economy where it needs to be.
“The good news for markets is that it seems highly unlikely that the Federal Reserve will risk tapering in December or January assuming the next budget negotiations go close to the wire again. It could be March at the earliest for tapering, which would continue to keep assets on the expensive side for the coming few months at least,” said Jim Reid, of Deutsche Bank.
Matt Kaufler — portfolio manager of the Clover Value Fund at Federated Investors — seconds that an opinion. “We’re likely to see further choppiness in the market, but I’d say we still have room for another 5 to 7 percent upside from here until year end.” The recent spending bill and debt ceiling increase is slated to run dry January 15 and February 7 respectively.