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Financial markets barely reacted Wednesday to the U.S. House of Representatives’ passage of a debt ceiling deal that would avert global financial turmoil and an all but certain recession.
S&P 500 futures were virtually flat. Japan’s Nikkei 225 stock index rose 0.7%. And gold, which serves as a haven in uncertain times, was largely unchanged.
That’s because stocks never fell in the lead-up to the vote based on expectations that Congress ultimately would reach an agreement to avoid default, says Jason Ware, chief investment officer of Albion Financial Group. Also, he says, the legislation still awaits passage by the U.S. Senate in the coming days.
“Stocks have been resilient all throughout this episode of D.C. brinksmanship,” Ware says. “Investors have essentially said, ‘We’ve seen this movie before,’ and thus there’s no ground to recover as we get to the other side of this hazard.”
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Rather, he says investors can return to fretting over a more familiar set of woes — inflation, Fed interest rate hikes and the risk of a recession.
“Now back to our regularly scheduled program,” Ware says.
The S&P index closed Wednesday at 4,180, up 9.3% so far this year.
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