No-News Events
Don't Let the News Media Sway Your Opinion Too Much
On constant occasion, the media bombards investors with endless amounts of information and opinions. Most of the time, it can be difficult to translate the jumble of media opinions into an investment or trade idea. Other times, it can seem like equity markets are reacting to news contrarily to how you would expect it to react.Currently, in the media, just like many times in the past, we are seeing headlines about the US Congress having trouble reaching a debt ceiling agreement. Or there is a potential government shutdown because Congress can not do their job. The situation this time around will be a bit more complicated since Senator McCarthy was voted out of his position as Speaker of the House.
There Has Never Been a Government Shutdown
All of the talking heads on the news are going to make this sound like a major market moving event. It will have major potential consequences in equity markets. This is absolutely true if Congress could not reach an agreement to pay off its debt obligations. But this has never happened before. America has never experienced a default, and it seems like they never will. The US will always have at least enough money to pay the interest of the debt to avoid a default.
Decades ago, potential government shutdowns were non-existent. But nowadays, it seems like Congress is about to shut down just about every time the subject comes to a vote. It's like a game to them.If the government truly did shut down for an extended period, then it could possibly lead to another credit downgrade of the US economy, which would likely have very negative consequences in equity markets. How do you think potential investors in American debt will react when they hear that the US government will not be paying their debt?
Conclusion
In my opinion, headlines of potential government shutdowns are no-news events. The media will hype up or sensationalize these news stories, which likely causes some bearish sentiment.The truth is that there has never been a true, extended government shutdown. Congress always comes to an agreement at the last moment. And this makes perfect sense because if Congress can not come to an agreement on debt obligations, then they are not doing their job mandated by law, and it's not likely that they will get reelected. It would be career suicide or political suicide. They definitely do not want to lose their job in politics. So they always come to an agreement at the end.
Anytime I hear a news story about the US government shutting down, I pay no attention to it until it actually happens. Every time they talk about a potential government shutting down, it always avoided, and equity markets are unaffected.
There is always a first for everything. Do you believe the government will shut down? If so, how do you think it will affectequity markets?
As always, I am not a financial professional, and this is not investment advice. Be careful and be patient. Dont anticipate the market. Rather, participate in the market. Give your investments time. Don't be greedy. Don't invest in anything you don't understand. Don't put all of your eggs in one basket. Don't listen to the hype. Don't fomo or panic into or out of trades. Do your own due diligence. And just follow the trends. A trend is your friend. Good luck trading.
$Apple(AAPL.US$ $Microsoft(MSFT.US$ $Amazon(AMZN.US$ $Tesla(TSLA.US$ $NVIDIA(NVDA.US$ $Advanced Micro Devices(AMD.US$ $Amazon(AMZN.US$ $Meta Platforms(META.US$ $Alphabet-C(GOOG.US$ $Alphabet-A(GOOGL.US$ $Netflix(NFLX.US$ $Tesla(TSLA.US$ $UnitedHealth(UNH.US$ $Home Depot(HD.US$ $Berkshire Hathaway-A(BRK.A.US$ $Berkshire Hathaway-B(BRK.B.US$ $Johnson & Johnson(JNJ.US$ $Eli Lilly and Co(LLY.US$ $Visa(V.US$
$Invesco QQQ Trust(QQQ.US$ $iShares Russell 2000 ETF(IWM.US$ $VIX Index Futures(MAY4)(VXmain.US$ $SPDR S&P 500 ETF(SPY.US$ $SPDR Dow Jones Industrial Average Trust(DIA.US$ $iShares MSCI Emerging Markets ETF(EEM.US$ $Gold Futures(JUN4)(GCmain.US$ $E-mini Dow Futures(JUN4)(YMmain.US$ $E-mini S&P 500 Futures(JUN4)(ESmain.US$ $E-mini NASDAQ 100 Futures(JUN4)(NQmain.US$ $E-mini S&P MidCap 400 Futures(JUN4)(EMDmain.US$ $E-mini Russell 2000 Index Futures(JUN4)(RTYmain.US$ $CBOE Volatility S&P 500 Index(.VIX.US$ $VIX Index Futures(MAY4)(VXmain.US$
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
Trade the trends via technical, fundamental, and macro analysis. Day Trades, swing trades, and long-term investments.
16KFollowers
2943Following
28KVisitors
Follow
Mike Obama : are aliens bullish or bearish? i need to know..
SpyderCallOP Mike Obama: definitely bearish. Maybe bullish for the military industrial complex
SpyderCallOP Mike Obama: will aliens be the next black swan???
Mike Obama SpyderCallOP: indefinitely. Do you think the stuff in Israel will move the market?
SpyderCallOP Mike Obama: maybe a little bit. There is always some crazy stuff going on over there. Remember when Isreal had to use their "iron wall," or whatever it is called, to defend against hundreds of rockets from Palestine. That moved markets a bit. But nothing too crazy
Mike Obama SpyderCallOP: we'll see in the morning. i pray for peace. but they both want blood. just hope no one uses a nuke.
SpyderCallOP Mike Obama: agreed
razo2 : now with Israel at war. they can never shutdown. they shutdown Gaza will wipe them out. money printing is endless but it will downgrade their bonds value.
that Israel war has always been there for so long. I doubt that will affect the market for now. but US have to choose Israel to fight now. Ukraine will be attacked worse by the Russian as US now needs to focus on two wars instead of one. for now.
oil prices will go up.
SpyderCallOP Mike Obama: okay, now there has been an official war declaration. This makes it more serious. Most other attacks by the Palestinians were small skirmishes basicaly. This one looks a lot more like a very organized insurgency.
If this lasts a prolonged period, then this will more than likely cause a lot of uncertainty in the markets. Uncertainty is never good for equities.
Do you think Russia is backing the Palestineans?
SpyderCallOP razo2: that sounds about right to me. The one thing I see a bit different this time is that the attack by the Palestinians seems a bit more organized this time around. Usually, the skirmishes between the two sides don't last long as Isreal has a much MUCH stronger military. This one looks like it could last a bit longer than usual. But of course, I am all the way in America, so I obviously don't know the whole picture as I can only see what is on the news.
Either way, this will put more uncertainty into market sentiment. Uncertainty is never good in markets.
View more comments...