[video] Quick Take: Investors Taking Shutdown in Stride
Mark Newton, chief market technician at Greywolf Equities, told TheStreet's Debra Borchardt that investors with a long-term perspective should wait for more clarity from Washington.
With markets essentially unchanged from a week ago, the selloff has been pretty calm. Newton added that the pullback has been similar to June and August, with very little technical damage being done.
He went on to say that while consumer discretionary and industrial stocks have been doing pretty well, financials, which make up 18% of the S&P 500, continue to lag, which makes a broader market rally difficult to spark.
China recently suggested to the U.S. that it get its issues in order because the shutdown is causing a lot of stress on global markets. Hamilton reminded everybody that China is a large holder of U.S. Treasuries, and could begin unwinding those positions if it so chose.
While he admitted this course of action would be unlikely, it would wreak havoc in the bond markets.
The government needs to get its act together, while also trying to curb spending, he agreed. Hamilton concluded that the U.S. dollar/Japanese yen has had a strong correlation to U.S. equities. The dollar has been lower, and it will be interesting to see if the correlation holds true, which would mean a lower stock market, he said.
-- Written by Bret Kenwell in Petoskey, Mich.