I asked everyone not to panic, but I must admit that I thought there would have been more downside pressure, even though the big clip moves always get markets to where it's going faster. Now, all the major indices are back above their key moving averages, as former critical support points served the same role on the upside. The thing that must be noted is the market celebrated the idea of less accommodation and less Washington DC friction. For Wall Street, it means the ability to focus on numbers, instead of the fireworks and the unknown.
Tea Party Blues
Speaker John Boehner surprised many yesterday, just as stock market trading was getting underway. By allowing a vote on a so-called "clean" debt -ceiling; he avoids a possible ugly public relations disaster that would come to pass, without a deal being in process, taking his Tea Party colleagues down another notch. Since the government shutdown, Speaker Boehner has been adamant about reeling in the rebels.
Maybe, even breaking their spirit once and for all...
I think the announcement was also a victory for Treasury Secretary, Jack Lew, whose warnings about hitting the debt-ceiling last week helped to drive the market lower. In fact, I even said on the air that Lew was "fear mongering," but his office contacted me immediately; they didn't read me the riot act, but hinted that I should be less inflammatory. And, they reiterated that the debt-ceiling was in jeopardy of being hit. They didn't like my use of the word "gimmicks" to explain how the nation could hit the debt-ceiling borrowing money every day and thereafter, and still not go through the debt-ceiling.
Of course gimmickry isn't just the province of the White House, as the Speaker removed any chance of anything else being topic number one this midterm election year, besides Obamacare. For now, there are a few chips and cracks in the Tea Party, but the new healthcare law looks like a mountain of shattered promises.
Wall Street Euphoria
Chairwoman Janet Yellen, the new top honcho at the Federal Reserve, is staying the course which isn't exactly man-bites-dog kind of stuff. The Street needed to hear this, even through a convoluted speaking sentence structure and cadence, which makes me think back to the excruciating days of trying to understand Alan Greenspan. She's not a salesperson; by the same token, she's not one to rock the boat either, and in the process she has managed to close Wall Street and Washington.