Stock Market Reality: The Truth On The House Vote
The markets are holding their collective breath as they look towards the vote later in the House of Representatives. John Boehner's bill outlining budget cuts and raising the debt ceiling will be on the chopping block. This is ultimately the biggest vote the markets have seen since TARP passed in 2008. The reason why it is so big? If it fails to pass, it is likely no deal will be reached by the August 2nd deadline. Should it fail to pass this evening, the futures will likely dive three-percent or more in after hours trading and Asia and Europe will tumble. If it passes, the futures will spike. Many amateurs think that even if the bill gets past the House, it will fail in the Senate. While this may be true, my guess is it will matter. Should the bill pass in the House, the Democrats will ask for small changes and revise it slightly, then pass it. Again, it all comes down to the first vote this evening. Watch it like a hawk.
The markets are bouncing slightly after yesterday. A little bit of optimism is creeping in on hopes the new spending and debt ceiling bill will pass. The SPDR S&P 500 ETF (NYSE:SPY) is trading at $131.29, +0.68 (+0.52%). The Dollar continues to inch higher as well. This may be a leading indicator that is telling the market a deal is coming. The PowerShares DB US Dollar Index Bullish (NYSE:UUP) is trading at $21.14, +0.05 (+0.24%).
The leading sectors today are technology and banks. International Business Machines Corp. (NYSE:IBM), Apple Inc. (NASDAQ:AAPL), Google Inc. (NASDAQ:GOOG) and Amazon.com, Inc. (NASDAQ:AMZN) are all higher. In the financial arena, solid gains are being seen in Goldman Sachs Group, Inc. (NYSE:GS), JPMorgan Chase & Co. (NYSE:JPM) and Bank of America Corporation (NYSE:BAC).