The unsettled Congressional debate about budget and the debt
ceiling is dominating the headlines, offsetting this morning's
reassuring economic data. The Personal Income & Spending
numbers for August came in-line with expectations, though the
positive upgrade to the prior month's numbers is modestly
The University of Michigan Consumer Sentiment survey for
September coming out a little later is expected to lose ground
from the prior month's level. But it's reasonable to assume that
the stock market's attention will be squarely on developments in
The budget debate in Congress doesn't appear to be moving
toward a resolution ahead of the Monday deadline when the
existing authorization runs out. We will have a government
shutdown if we don't have a fresh budget authorization from
Congress by Tuesday. The markets don't seem to be fretting the
budget showdown as much as they do the debt ceiling issue, with
the government on track to run out of borrowing authority in
about three weeks time.
Hard to envision at this stage how the gap between the
administration's position of no negotiations on the debt ceiling
and the House's long list of demands will be bridged. There
aren't even any back-channel negotiations on the issue at this
stage. Given this unsettled political backdrop, the Fed was
perhaps justified in waiting a bit longer before starting the
In corporate news,
) came out with earnings and revenue beats, with strength in
North America and Europe offsetting Chinese softness.
) guidance came out short even though the consulting firm's
results beat expectations. The Accenture disappointment likely
has some read-through relevance for
) and other players exposed to IT spending trends.
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