This week was high on drama, but very low on progress. Stocks jumped around based on political posturing, but just as no progress was made with the stalemate over the continuing resolution to fund Obamacare, neither did the the stock market make any net progress for the week. Here are a good couple of charts that show the value proposition that we’re experiencing in the stock market.
Monday, as the ominous U.S. government “shutdown” loomed, stocks in Asia dropped 1.6%, and in Europe and the U.S. 0.7% on low moderate volume. The VXO shot up nearly 9% to close just shy of 16. Tuesday, after the U.S. government shutdown deadline came and passed without a spending agreement, stocks rose in Asia 0.4%, in Europe 0.7%, and in the U.S. 0.8% on very low volume. The VXO retraced Monday’s big move to close down 9% at 14.55. Precious metals and their miners lost 3% as gold dropped below $1300 per ounce.
Wednesday, stocks dipped 0.3% in Asia and 0.7% in Europe, but were little changed in the U.S. on low volume as the U.S. government spending standoff continued without progress. Precious metals rose about 2% and gold rose back above the 1300 mark. Thursday stocks rose 0.7% in Asia, but they dropped 0.4% in Europe and 0.7% in the U.S. on low volume driven in part by reckless remarks about the markets by politicians. The Dow Jones Industrial Average tumbled to close just below the 13,000 mark. With FaceBook still over $49, it’s hard to look at this decline as any serious movement downward.
What does this shutdown really entail? Here’s a link that lays it out. Friday, stocks closed slightly lower in Asia and slightly higher in Europe. In the U.S. stocks recovered 0.6% for no particular reason for no particular reason. The VXO declined about 5% to settle in just shy of 16 and the Dow Jones Industrial Average climbed back above the 13,000 mark.