Looks Like Friday's Market Will Rise

Stock markets will likely rise on Friday due to the changing GOP stance on the current government shutdown and debt ceiling debates. Yesterday, the S&P 500 (SPY) lost .90%, the Dow Jones Industrial Average (DIA) lost .90%, and the NASDAQ 100 (QQQ) suffered the worst of the lot with a 1.07% loss.

US stock markets likely declined yesterday in realization that the government shutdown was real and that politicians were unwilling to compromise on a deal. The mood appeared to shift however as House Speaker Boehner said that he would not let the United States default. Furthermore, other moderate Republicans began voicing the possibility of passing a bipartisan bill to re-open the government, and even more rumors included a 2-for-1 deal, in which the House may pass a bill re-opening the government and extending the borrowing limit well before the October 17th deadline. Regardless of what does actually happen, I think investors have a renewed sense of hope again, and that hope is why I think markets will rebound on Friday.

From a technical perspective, the S&P 500 barely broke through its 50 day moving average yesterday. The S&P’s 50 day moving average still provides a very strong floor of support, and it will likely take a government default to break it. In the meantime, the S&P 500 will likely not break through, especially considering the new political movement in Washington.

European markets closed mixed once again, and Asian markets are currently down at time of writing. Futures markets are currently up at the the time of this writing, suggesting higher markets tomorrow.

Economically, our jobless claims report indicated a rise in jobless claims for the week of September 28th which is no good, and today we are due out for the US Government’s non-farm payrolls report and unemployment rate report which we will likely not get because of the shutdown. Oh, the irony. 800,000 people are still out of work by the way, do not forget that.

Lastly, for your fun fact of the day, Twitter just announced its intentions to raise $1 billion for its IPO when King.com, the creators of the famous Candy Crush mobile app, are expecting to raise $5 billion for their IPO. So, the new Twitter (TWTR) will be worth less than Candy Crush? Maybe social media is getting crushed.

Bottom line: New potential political concessions on the side of the GOP might perhaps give investors hope today of avoiding a default by October 17 and re-opening the government soon. Time will tell all, but the ice is melting for now. Happy trading!

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