Thursday morning is a look at how asset classes are reacting to the deal to end the government shutdown and settle the debt ceiling issue (for now).
iShares 20+ Year Treasury Bond ETF (NYSE:TLT)
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After rising over the last two weeks, the yields on government bonds are beginning to tumble after the announcement that the shutdown has ended. The yield on the 30-year hit 3.8 percent yesterday before closing at 3.72 percent and it is tumbling even more today. As yields fall, the price of the bonds increase and therefore TLT is moving higher pre-market. The ETF closed up 1.4 percent yesterday and could continue to bounce a few more days.
PowerShares DB US Dollar Index Bullish ETF (NYSE:UUP)
The value of the US dollar has continued its downtrend this morning after the deal in DC. Pre-market the ETF is down 0.8 percent, which is a big move for the index. The rally in UUP was short-lived and it appears investors would rather focus on the fact the Fed continues to de-value the currency versus the deal in DC. Support to watch on UUP is the $21.50 area.
SPDR S&P 500 ETF (NYSE:SPY)
The consensus is that stocks should be rallying this morning after a deal was solidified last night, right? Not the case, in fact stocks in the US are falling. The 1.4 percent rally yesterday and the 4 percent gain in the last week was the DC deal buying spree. Today we get back to looking at the market fundamentals and earnings season. Disappointing earnings from IBM (NYSE: IBM) and eBay (NASDAQ: EBAY) are weighing on stocks along with profit-taking after the deal. The big picture remains very bullish with SPY beginning the morning down only 0.4 percent from an all-time high. The bulls remain in charge.
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