- Title: Wall Street closes up amid inflation concerns, debt ceiling debate
- Date: 29th September 2021
- Summary: NEW YORK, NEW YORK, UNITED STATES (SEPTEMBER 29, 2021) (REUTERS) (SOUNDBITE) (English) BARRETT ASSET MANAGEMENT CHIEF INVESTMENT OFFICER, AMY KONG, SAYING: "There is a lot going on in Congress right now, with the debt ceiling being top of that laundry list to a number of things going on to financing this infrastructure bill, potential changes to the estate and tax rules, many, many things on this list. Looking back to how the markets have reacted to government shutdowns and quite frankly, there have been a number of them since the 1980s, 14 to be exact, since 1980, the market reaction has been, on average, muted. Given government shutdowns, I think the average draw down the week before shutdown is roughly around 2%, maybe 3%. And so from that standpoint, it's comforting to know that the markets try to look past the fact that the government may shut down and probably will try to find a resolution. I think the bigger risk is when we start to get confirmation of potentially what the tax rules are. I know that right now, the numbers are being thrown around, that it could be somewhere between 25, 26, 27%. And the markets are adjusting for that higher tax rate to a degree, but I don't think it's fully baked in yet. So when we get closer to the point of whether it's 26.5 or 27%, I think the market will start to adjust earnings for 2022 and onwards to better match what Congress is saying. And so right now, I think the markets are thinking that it could be somewhere around 25%, it may be higher. And so ultimately it may take a couple of dollars off from where 2022 estimates are. And it doesn't really derail the system, but it certainly will add to volatility as we get more and more confirmation of what those numbers look like."
- Embargoed: 13th October 2021 21:14
- Keywords: Dow Jones Fed Powell Wall Street stocks
- Location: NEW YORK, NEW YORK, UNITED STATES
- City: NEW YORK, NEW YORK, UNITED STATES
- Country: USA
- Topics: Economic Events,Equities Markets,United States
- Reuters ID: LVA002EWRWSP3
- Aspect Ratio: 16:9
- Story Text: Wall Street ended firmer on Wednesday (September 29) in a partial rebound from the previous day's broad sell-off, with remarks from U.S. Federal Reserve Chairman Jerome Powell and the ongoing debt ceiling debate keeping a lid on gains.
The S&P 500 index and the Dow Jones Industrial Average advanced, but the Nasdaq Composite closed lower as Treasury yields halted their ascent. Defensive sectors took the lead as investors sought stability in the volatile market.
Still, all three remain on course to post monthly declines, with the bellwether S&P 500 snapping a seven-month winning streak.
Powell, speaking at a European Central Bank event, expressed frustration over persistent supply chain woes which could keep inflation elevated for longer than expected.
The stock market strengthened following his remarks.
Wrangling continued on Capitol Hill over funding the government as the Friday (October 1) deadline to prevent a shutdown approached, with mounting concerns over a U.S. credit default.
U.S. Treasury yields paused after a runup in recent days as the debt ceiling debate unfolded in Washington.
The Dow Jones Industrial Average rose 90.73 points, or 0.26%, to 34,390.72, the S&P 500 gained 6.83 points, or 0.16%, to 4,359.46 and the Nasdaq Composite dropped 34.24 points, or 0.24%, to 14,512.44.
(Production: Conway Gittens, Roselle Chen, Hyeongmi Kim)
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