The as House of Representatives attempts to use its constitutional authority to slow the reckless government spending spree, the President and Senate seek to attach blame for the partial government shutdown and potential future default on bonds on the House Republicans and the TEA Party in particular. The stock market apparently believed the Republicans will again throw in their chips and abdicate their responsibility allowing the spending to roar on unabated. For the week the U.S. stock market gained about 0.7%. and the VXO fear gauge fell about 8% while precious metals lost 3% and their miners about twice that.
Monday, stocks fell in Asia 0.6%, in Europe slightly, and in the U.S. 0.8% on very low volume. The VXO shot up nearly 15% to close at 18.33 as the perceived possibility of the debt ceiling holding firm increased. Tuesday, in Asia stocks rose 0.3% but in Europe they fell 0.8% and in the U.S. the dropped 1.2% on low volume. The VXO rose more than 8% to close just shy of 20. Precious metals held steady, but their miners were hammered about 3%.
Wednesday, stocks in Asia gained 0.3% as word surfaced that Janet Yellen would be nominated for the position of Federal Reserve Chairman, but shares in Europe lost 0.5% while in the U.S. they rose slightly on low volume. Overall the day was fairly boring.
Thursday, stocks in Asia rose slightly. In Europe and the U.S. the story was quite different. By the time stocks in Europe closed, the Speaker of the House announced he would talk to the President about a six-week can kick. Stocks soared 1.6% in Europe 1.6% and 1.9% in the U.S. on low volume. The Dow Jones Industrial Average blew through the 13,000 level again while the VXO crashed 15% to close at 16.16, and gold fell below $1300 an ounce.
Friday, stocks rose in Asia 1.3%, in Europe 0.5% in the U.S. 0.7% on low volume. The VXO continued its nosedive dropping nearly 8% to end the week at 14.77 while the S&P 500 Index closed above 1700. Precious metals lost 2% as their decent continued.