The debate continues on in Washington as there are less than 15 hours remaining to get a budget and debt limit deal done. Will it get done is the question and if it does what will it mean. IF it doesn’t what are the ramifications. It would seem that there are some in regard to this debate that do not care about the ramifications, which in my view is insanity. However, my view does not count. All we can hope for is cooler heads will prevail in the end.
Asia was mixed overnight as Japan was higher on a weaker yen and China sold off more than 1.8% on concerns with the US political fight.
Europe is lower by about a quarter point at midday once again on the US uncertainty.
In contrast, US futures are higher by about 0.75% on earnings news as both Bank of America and US Bank both beat estimates with good revenue numbers and decreases in loan losses. As we go through the five year line on the 2008 decline, many of those bad mortgages are now off the books of many of the big US banks and balance sheets continue to strengthen. Both stocks are mandate positions.
Gold is up 8 bucks to 1281, oil is lower by 0.13 to 101.07 and the loonie is stronger by 0.10 to 96.47. Bond yields have been inching higher this week as the 10 year US and Canada bonds are yielding 2.74% and 2.66% respectively.
Bond rating service Fitch has put the US on credit watch with a negative bias, which was to be expected as the deadline on the debt ceiling continues to near. I would expect Moody’s and S&P to do the same if no deal is reached today.
Lastly, the NYSE has scored a coup over Nasdaq by getting the listing for the new Twitter IPO due out later this year. After the debacle at the Nasdaq last year when Facebook went public, the NYSE was the favored exchange going into the negotiations.
|Kenneth A. Dick, BA, CIM, CFP, FCSI
Branch Manager & Portfolio Manager | Independent Wealth Management
Canaccord Genuity Wealth Management