Stocks climb to all-time highs

Stocks climb to all-time highs

Credit: Getty Images

CHICAGO, IL - OCTOBER 16: Traders signal offers in the Standard & Poor's 500 stock index options pit at the Chicago Board Options Exchange (CBOE) on October 16, 2013 in Chicago, Illinois. The major stock indices reacted favorably today as it appeared a deal that would end the government shutdown was close to being reached. (Photo by Scott Olson/Getty Images)

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by Zach Wade

KMOV.com

Posted on October 18, 2013 at 1:16 PM

Updated Friday, Oct 18 at 1:16 PM

Investors react to good global economic news to lift the S&P 500 more than 0.6% into record territory early Friday afternoon. 

A few reasons for the meteoric rise:

1) WASHINGTON RELIEF: Investors continue to feel relieved as fallout from the US government shutdown appears to be minimal. The worst case scenario for not reaching the deal in time included a recession projected to be deeper than that caused by the 2008 financial crises if the government could not pay it's debts.

Less severe scenarios included a downgrade on the government's credit rating which would have raised interest rates on everything from federal borrowing to home mortgages. All risks of a rise in interest rates looks to be removed.

2) CHINA SYNDROME: Third quarter data coming out of China is better than the most bullish of estimates. Coming off of 7.5% growth in the second quarter, Chinese growth was expected to slow. Instead, the country is growing at a 7.8% annualized clip. This bodes well for continued global growth as well as increasing US exports to China, thereby raising investor hopes.

3) CORPORATE EARNINGS: There's no better way to increase stock value than to see real corporate growth. Morgan Stanley and General Electric both exceeded Wall Street's earnings targets. Google enjoyed a 36% increase in profit to nearly $3 billion for the third quarter. 

 

 

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