The equity markets pulled back sharply today, down to our support levels, as they had a bit more difficulty ignoring the debt situations in Europe and the US.
The key pivot level on the SP Futures is from 1305 to 1307.50.
Let's see if this support level will hold. Alcoa reported a revenue beat and an earnings miss after the bell. Earnings news from individual companies will present a set of cross currents to the macro developments.
I am fairly confident that Obama and Boehner have already reached a deal of sorts, with some details still to be provided closing some tax loopholes and allowing tax cuts to expire in a couple of years, with overall budget cuts around 2.5 trillion or so. It remains to be sold to the House, and the Senate will approve.
Both sides will claim victory.
No real problems will be solved.
The actual resolution will come as a response to the next financial crisis. It will probably be messy, and sub-optimal, but seemingly the only choice left on the table.
Until then they will continue to serve up politically based and increasingly bizarre concoctions for Benny and the real economy to watch, increasingly in despair of something worthwhile and substantial.
Watching these jokers at work is emotionally draining, like prune juice for the soul.
