US Shares Set New Record on Debt Ceiling Deferral

US Shares Set New Record on Debt Ceiling Deferral

By Michael McCarthy (Chief Market Strategist, CMC Markets)

Shares in America hit all-time highs overnight following Congressional bills that re-opened the US government, lifted the debt ceiling and deferred spending cuts. The initial market reaction was negative, as markets “sold the fact” and contemplated a return of political instability as the newly created December and January deadlines loom. However, conciliatory talk from the President about the need for long term solutions calmed frayed nerves.

Not all markets reacted positively. The USD dropped as concerns about the Fed’s ability to taper rose. Oil tumbled on an increase in supplies. Residual market fears drove gold up 3%, and copper and aluminium fell as investors and traders assessed the likely impact of the US shut down on short term demand. This may see mining and energy stocks dominate action in Australian shares today.

Markets in the Asia Pacific region are focussed on today’s release of China GDP, industrial production and retail sales data. Expectations have frothed, with consensus for GDP growth now around 7.8%, despite central authorities expressed desire to target 7.0% long term growth. Industrial production growth in September is forecast around 10.1%, and retail sales 13%. Any disappointment on these numbers could deflate newly buoyant market sentiment.

ends

© Scoop Media