Morning Market Roundup: French Downgrade and Supercommittee Failure
- Posted on November 21, 2011 at 8:50am by
Becket Adams
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Here’s what’s important in the financial world this morning:
EU: Moody’s warned that France is at risk for a downgrade in the credit rating agency’s outlook. This does not mean a loss of its AAA rating is imminent. It does mean that another eurozone nation has been completely caught in the web of recession and sovereign debt concerns. Most experts believe that the eurozone can survive if only small and weak members like Greece risk default. Now, the third largest economy in Europe, Italy, is under scrutiny, and the second largest, France, is up against more skepticism from international capital markets investors.
France probably has until early next year, when it releases fourth-quarter GDP, before buyers of sovereign paper pass judgment.
U.S.: The Dow Jones Industrial Average moved back to 12,000 recently after selling down to 11,000 in late September. It looks likely that lower range will be tested again, perhaps this week. The Dow is at 11,976. It would only take a sell-off during this week’s four trading days to push the index much lower. And the ingredients are ready. EU sovereign debt trouble has worsened because of political unrest and the harsh light shined on Spain and Italy recently. China’s rulers recently commented that the world has entered a recession that is likely to persist for some time. Most estimates for U.S. holiday sales have weakened. And early results of store activity should be available by the end of Thursday—Thanksgiving.
Politics: The so-called supercommittee likely will announce in the next 24 hours that it has failed to reach an agreement on deficit reduction. That will begin to trigger budget cuts of well over a billion dollars. It also will nearly kill the hopes of Democrats for an extension in unemployment benefits. Hundreds of thousands of the jobless may have no income next year. That will take them out of the consumer economy and put more strain on state and local governments, as well as the friends and families of many of these people. A “no decision” by the committee will increase worry about what will happen to the economy as it moves into 2012.
A shortened trading week may make markets in the U.S. unusually volatile. Traders will have to use the first three days of the week to position themselves for bad news from Europe. Trouble on Thursday, if it comes, will not allow investors to react quickly. Friday is a short trading day. If supercommittee decisions and anxiety about the weekend’s negotiations within several EU nations on the road to austerity cause a flight from equities, the last day of the week could be one of the most volatile sessions of 2011.
(Douglas A. McIntyre—24/7 Wall St./The Blaze)
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Gold Coin & Economic News
Posted on November 21, 2011 at 4:46pmNo success was possible with the ridiculous Super Committee. What a joke:
Report Post »http://www.congressinsiders.com/2011/11/did-congress-actually-think-the-super-committee-would-succeed/
Rayblue
Posted on November 21, 2011 at 2:15pmA stall tactic. Buying time for the handbasket weaver.
Report Post »Mikev5
Posted on November 21, 2011 at 2:09pmWe need our military strong with all the other nations collapsing protection is more important than ever wars will be coming watch out America dong get caught with our pants down.
If we do we are doomed
Report Post »dmerwin
Posted on November 21, 2011 at 2:03pmWhat I am concerned about is they will “work together” to find a gimmick that absolves them of responsibility and basically ignore the teeth in the debt ceiling debacle and all for naught and lets spend another 2 or 3 or 5 trillion while congress tries to find it’s ass with both hands.
Report Post »gmoneytx
Posted on November 21, 2011 at 12:48pmThis “STUPID committee” smells like a rotten egg…We all know the outcome, just another distraction. If the next administration doesn‘t clean house of this mess we’re done.
Report Post »hauschild
Posted on November 21, 2011 at 10:40amI love this Super Committee nonsense, which is nothing more than a rouse. Those idiots and the media lay the foundation that this unconstitutional body of fools is of the utmost importance. Then they lead the lemmings on that this committee “might fail”, but then never really provide any concrete evidence of exactly why a “failure” would be so bad, considering they’re an illegal band of fools. Finally, the script reads the same time and time again – the band of fools comes together and gets “something” passed, and the lemmings (especially those in the market) feel an artificial sense that everything is finally ok, even if it isn’t. And, the stock market rises short term because people are generally complete idiots.
We‘ve seen this movie before and it’s a yawner. Remember the debt ceiling scheme? It’s going to play out exactly the same way. Something will get passed and the lemmings will rejoice – as they get yet nearer to the edge of that proverbial cliff.
Report Post »truthseekerusa
Posted on November 21, 2011 at 12:24pmYou are right. Anyone who invests in the stock market now might as well go to Las Vegas or play the lottery. People like Soros are in control of the market, currency manipulation, etc., make money off the fools who still trust the Obama administration and the Congress. Wonder if there will ever be a way to turn this Ship of Fools around?
Report Post »hauschild
Posted on November 21, 2011 at 1:08pmYeah, it is frustrating because I personally do not have enough money in a retirement account to take advantage of these false declines and falser appreciations. If I had a million bucks to play with, I probably could make some decent coin on these 1000 point swings.
It’s classic. Every time there is a significant drop, we know know that there will be – always – a rebound that either comes close, or overtakes the initial drop. And, it’s all based on socialistic premises to boot – that’s the real kicker.
Report Post »dmerwin
Posted on November 21, 2011 at 2:02pmWhat I am concerned about is they will “work together” to find a gimmick that absolves them of responsibility and basically ignore the teeth in the debt ceiling debacle and all for naught and lets spend another 2 or 3 or 5 trillion while congress tries to find it’s ass with both hands.
Report Post »lukerw
Posted on November 21, 2011 at 10:22amThe American Socialists want to cut Defence Spending… planning to cut Military Personnel (re Jobs Bills)…
Report Post »The EU cannot save it’s self… let alone Greece and Italy…
So, Democrat Economics is working as planned!
GrannyATL
Posted on November 21, 2011 at 10:30amPrecisely. This Supercommittee was always a planned failure. The gutting of the military has been the goal all along.
Report Post »JRook
Posted on November 21, 2011 at 10:32amYes clearly we need to spend as much on defense as the rest of the world combined. If you are truly concerned about federal spending then you might want to consider how much has been pocketed off of defense. If people are really serious about balancing the budget than everything should be cut the same amount immediately until a balanced budget is attained. Then the clowns in DC can debate on putting money back in their favorite programs. Rule is though you must fund it by taking money away from something else or raising the money to pay for it. As far as the long term deficit, there should be a tax surcharge on the wealthy and a 5% increase in the tax on capital gains, earmarked to pay it off.
Report Post »Joe Schmuck
Posted on December 2, 2011 at 12:17pm@GRANNYATL
Excatly! Obama gets what he wanted all along and doesn’t have to take the heat!
Report Post »youngsterz
Posted on November 21, 2011 at 9:05amIn the Politics section, automatic cuts will exceed a TRILLION, not merely a billion. Substantial difference.
Report Post »kevinthewriter
Posted on November 21, 2011 at 9:04amI’m doubling my investments in the currencies of the future: water and food.
Report Post »truthseekerusa
Posted on November 21, 2011 at 12:16pmMe, too. Putting money I used to invest in the stock market, mutual funds, etc. into food and water. I watch for the specials on nonperishable foods that I like to eat and add them to the larder. My mom had a garden and fruit trees and we spent many days canning them and putting them in the cold room in the cellar. During the winter we had a bonanza of wonder food. So stock piling food seems natural to me.
Report Post »SpankDaMonkey
Posted on November 21, 2011 at 9:02am.
Report Post »Merry Christmas Everybody……….
EqualJustice
Posted on November 21, 2011 at 8:58amSupercommittee SHOULD FAIL. Unconstitutional for this small group to meet behind closed doors to DEAL with OUR MONEY! I don’t understand it anyway…R.I.P.
Report Post »Al J Zira
Posted on November 21, 2011 at 9:10amYou’re absolutely right! It’s illegal and unconstitutional and should never have been formed. Now they’re get their “unintended” concsequence of gutting the military.
Report Post »AJAYW
Posted on November 21, 2011 at 9:18amAl J Zira
Report Post »Obams wants to gut the military its part of his big plan.
JLGunner
Posted on November 21, 2011 at 10:15amDamn right! Whats next the super duper commitee? ..and when they fail, do we get our power shut off? Are the members of this “super committe” getting extra pay for this? This battle in congress is a battle to fight anymore intrusion of socialism.
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