October’s dose of dysfunctional US Government may not be the last.
The time was that the global prize for crisis deferral – as opposed to resolution – belonged to the EU.
Contrarians probably are waiting for the other shoe – or in this case, U.S. stock markets – to drop.
If you’re not familiar with contrarian investing, the theory goes something like this: Consensus opinion is often wrong. When the majority of investors have a bullish outlook and believe stocks are going to move higher, the chances are stock values will drop. Likewise, when the majority has a bearish outlook and believes stocks are going to move lower, the chances are stock values will rise.
Americans are experiencing déjà vu all over again. Sure, the prospect of another fiscal showdown doesn’t electrify a crowd like a Rugby World Cup final against the Aussies. All the same, investors’ response to the possibility the U.S. government might partially shut down on October 1 was muted. Some U.S. stock markets gave back a little for the week; others moved higher. All remained up year-to-date.
