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Global Financial Markets Head for the Cliff

by John Nyaradi

Market Summary: Global markets headed yet closer to the cliff yesterday as the deficit battle raged on.

This is really getting scary now as today is Friday. That means that we’re heading into what could be a troubling weekend and then on to Monday with “D-Day” lurking just ahead on August 2nd.

Treasuries (NYSEARCA:IEF) and the Dollar (NYSEARCA:UUP) gained as investors can’t figure out where to hide, or if there is anywhere to hide. Markets still believe that Congress will get this done, but how long that belief, or suspension of disbelief goes on, is anybody’s guess.

The “Boehner Bill” was due to be voted on yesterday but was delayed as apparently the Speaker couldn't ensure its passage, which is truly incredible since he has a majority in the House, while the Senate says it's an exercise in futility as they won’t pass it anyway.

One can only wonder what these people are thinking and if they realize what kind of fire they’re playing with.

In case they’re wondering, a glance at yesterday’s late sell-off should give them a clue, along with its being the 4th down day in a row for U.S. indexes.

Another clue could be ratings agency S&P saying that $4 Trillion in cuts would be a good “down payment” which is truly scary since our political leaders can’t seem to get anywhere close to that number.

I don’t place blame, but Robert Reich, former Secretary of Labor under President Clinton makes some interesting remarks in The Empty Bully Pulpit.

And of course, today is Friday…..

Stock Market Summary:

Dow Jones Industrials (NYSEARCA:DIA): -62; -0.2%

S&P 500 (NYSEARCA:SPY): -4.0; -0.3%

NASDAQ (NASDAQ:QQQ) +1.5 +0.05%

Russell 2000 (NYSEARCA:IWM): -1.2; -0.2%

Today’s Action:

Economic Reports:

Today brings three key economic reports, 2nd Quarter GDP, July Chicago PMI, and July Consumer Sentiment.

It just doesn’t get more exciting than this.

Disclaimer: Wall Street Sector Selector actively trades a wide range of exchange traded funds (ETFs) and positions can change at any time.