Was That So Hard?

Good morning. I don't know about you, but I have had a hard time staying calm lately whenever the subject of the political wrangling over the debt ceiling in Washington has come up. In short, I find the finger-pointing, the name-calling, and all the he-said-she-said bickering on both sides of the aisle infuriating. My problem isn't about which side is right or wrong, but rather the staunch righteousness each party displays and the out-of-hand dismissals of anything and everything that might come from across the aisle - especially when the fate of the economy is on the line.

In other words, the "stuff" going on in Washington these days is getting old. From my point of view, it looks like the clock is winding down and these guys and gals had best not screw this one up they way they did with the first TARP vote. Silly me; I expected our elected officials in Washington to uphold their oath to do what is best for the country and their constituents they are purportedly there to represent. But instead, well, we are often treated to a three-ring circus with the primary objective being to make the opponent look bad.

To be honest, I'm not administration's number one fan when it comes to their economic policies. I was dead set against what I called the not-so stimulative stimulus plan from the very beginning. Not because I favored the other side's plan but due of the merits of the plan presented. I just didn't think there was much "stimulative oomph" in it from an economic standpoint. At the time, I understood that the President had to do something (anything!) in order to try and get the economy back on the rails. But after reviewing the plan, I argued that if the economy didn't perk up on its own, we might be in trouble because the expenditure of nearly a trillion dollars wasn't likely to do much in the way of stimulating growth in the long run. And sure enough, now that the money has been spent and there is no political will for additional stimulus, the economy is still limping along.

Because of this, I found it both surprising and refreshing to hear the President of the United States come out on Tuesday and say that he likes what the bipartisan "gang of six" is working on in terms of their plan for the budget deficit and the debt ceiling. After the President made his remarks and stocks began to shoot higher, I found myself thinking, "There, was that so hard?"

Sure, there may have been a political motivation behind the President's move. But the fact that there just might be a compromise plan that would actually avoid another meltdown in the financial markets gave me and every other holder of equities, a reason to be hopeful going forward.

Although I have been saying that I don't think we'll see an abject disaster to the tune of the 2008 Credit Crisis either here or across the pond, the market action over the previous seven trading days was beginning to make me rethink my stance (remember, people are often wrong, but the market never is). But with a plan in the works here at home and the folks across the Atlantic working on how to deal with Greece et al, the shorts covered and the buyers came off the sidelines en masse on Tuesday. Oh and a decent report on the housing market (for a change) as well some strong earnings from some big names didn't hurt either. Now if we can just avert disaster for another day or two...

Turning to this morning... Apple's blowout earnings report has put a smiley face on most markets overnight. In addition, the improved sentiment toward the debt ceiling debate has U.S. futures looking to open higher in the early going.

On the Economic front... There is no data scheduled for release before the bell, but we will get a report on Existing Home Sales at 10:00 am eastern.

Thought for the day... Try sending positive thoughts to someone who is hurting or in need today...

Pre-Game Indicators

Here are the Pre-Market indicators we review each morning before the opening bell...

• Major Foreign Markets:
  • Australia: +1.74%
    
  • Shanghai: -0.10%
    
  • Hong Kong: +0.46%
    
  • Japan: +1.17%
    
  • France: +1.62%
    
  • Germany: +0.46%
    
  • London: +1.09%
  
  
• Crude Oil Futures: +$1.24 to $98.74
  
• Gold: -$11.20 to $1589.90
  
• Dollar: higher against the Yen, lower vs Euro and Pound
  
• 10-Year Bond Yield: Currently trading at 2.917%
  
• Stocks Futures Ahead of Open in U.S. (relative to fair value):
  • S&P 500: +5.32
    
  • Dow Jones Industrial Average: +33
    
  • NASDAQ Composite: +15.33

 

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The opinions and forecasts expressed are those of David Moenning, founder of TopStockPortfolios.com and may not actually come to pass. Mr. Moenning’s opinions and viewpoints regarding the future of the markets should not be construed as recommendations. The analysis and information in this report and on our website is for informational purposes only. No part of the material presented in this report or on our websites is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed nor any Portfolio constitutes a solicitation to purchase or sell securities or any investment program. The opinions and forecasts expressed are those of the editors of TopStockPortfolios and may not actually come to pass. The opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security nor specific investment advice. Stocks should always consult an investment professional before making any investment.

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