Despite the possibility that the U.S. Federal Government is once again going to shut down on Friday, the markets opened with strong bullish momentum and pushed equities higher by the end of the week.
The Dow broke above the 26,000 mark after the holiday weekend, but markets had a mixed day on Tuesday. However, by the closing bells on Wednesday, the Dow climbed more than 300 points and closed above the 26,000 mark for the first time.
Despite having a majority in both houses, the GOP has so far failed to pass a new spending bill. If we don’t have a bill by Friday night, we will have another government shutdown. However, Speaker of the House Paul Ryan came up with a bill on Tuesday that could extend funding until February 16. Nonetheless, investors seemed not to be worried about the political process and appreciated several higher-than-expected earnings from the banking sector.
To conclude, market participants have learned to ignore short-term political issues a long time ago, but it was the good news regarding economic activity like the rising industrial production and capacity utilization rate that kept the bullish momentum going this week.
Be sure to check out our previous week’s edition here, wherein investors were concerned that China might halt U.S. bond purchases.