Despite the last-minute nature of the compromise to reopen the government and suspend the debt ceiling until early 2014, markets powered higher across the board. While the deal was an important positive for markets in that it removed a significant systemic risk, the rally in stocks appears excessive. For the week, the Dow Jones Industrial Average gained 1.1% to close at 15,399, the Nasdaq Composite rose 3.2% to 3,914, and the S&P 500 Index climbed 2.4% to 1,744, a new record high. In fixed income markets, Treasury yields fell (as prices correspondingly rose), with the yield on the 10-year Treasury falling from 2.69% to 2.59%.
Tuesday 22, October 2013 by Russ Koesterich