EmailIt appears that the Super Committee is not going to be so super and it also appears that things in the eurozone are still not super. The U.S. equity market, therefore, is indicated to open noticeably lower, which is just super.
The S&P futures are 1.2% below fair value, cementing an expectation that the cash market will follow the path laid by European markets, most of which are down at least 2.0%.
Essentially, there is a confluence of negativity overhanging the market this morning.
That mindset exists, too, not so much because there is anything truly new that is bad, but because there is a disappointed sense that the political will, and ability, to craft credible solutions to the same old problems is lacking.
Democrats and Republicans are again playing the blame game for why the Super Committee has been unable to reach a compromise on a deficit reduction plan.
An opposition leader in Greece won't sign a written guarantee indicating his party's commitment to implementing the reform measures necessary to receive the next tranche of troika support.
Moody's is warning that recent developments in France (rising rates and weak growth), should they persist, pose an increased risk to the country's credit outlook.
Uprisings in Egypt are picking up again amid discontent over the country's political path.
Bond yields in the eurozone remain elevated and credit spreads versus Germany are widening. The ECB, meanwhile, continues to stick to its single mandate line.
Questions persist about the eurozone's survival. Warren Buffett was even quoted today as saying the system is not working in its current form.
China’s vice premier expressed worries about a global recession.
It is a wonder why the futures market isn't down even more than it is. Then again, the equity market has learned in a way to co-exist with this looming cloud of negativity, which gets paid a lot of lip service by relevant officials that makes one want to believe something effective will eventually get done on the policy front.
At this very moment, though, market participants aren't finding much to be thankful for on the policy front, which is why this Thanksgiving week is set to start on a not-so-super note.
--Patrick J. O'Hare, Briefing.com
Patrick J. O'Hare is Chief Market Analyst for Briefing Research, Briefing.com's institutional research service. To request a free trial, please email researchsales@briefing.com.
