The rest of the world is beginning to react to what is being described, by a British Minister, as “Right Winged Nutters” in Washington DC. Speculating that the U.S. may not be able to come to some term of agreement on raising the debt ceiling before the August 2nd deadline, financial markets around the world are starting to show some signs of uncertainty. Early Monday morning trading reflected the following.
Stocks fell Monday morning in New York, with the S&P 500 dropping nearly 1 percent before paring losses, to settle around 0.8 percent below Friday’s close. The Dow was down 0.9 percent.)Major stock indices around the world felt strain. The Stoxx Europe 600 Index dropped 0.4 percent, biting into a four-day run of gains, and in Japan, the Nikkei 225 Stock Average fell 0.8 percent, down from a recent high, Bloomberg reports.
Yields on 10-year U.S. Treasury notes increased slightly, reflecting increased nervousness about the nation’s debt. The 30-year rate rose to a nearly two-week high, Bloomberg reports. Treasury rates are still low enough, though, to suggest that investors see default as a remote possibility.
John Silvia, chief economist at Wells Fargo, held an interview before the U.S. stock market opened Monday and said, “we have enough plans. All we really need are people to come to some kind of an agreement on what’s going to get done.”
Try telling that to the Teaparty and Republican leaders, who still believe there is no cause for alarm.