As such, raising the debt ceiling is critical and necessary\nfor the country to pay its bills on time, but it is also routine \u2013 the debt\nlimit has been raised almost 100 times since World War II. Before the world\nwars, Congress had to approve borrowing every time debt was needed to finance new\nspending, but war spending changed the process \u2013 and in some cases, made it\npolitical. <\/p>\n\n\n\n
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Make the Most of Your Investments During This Market<\/a><\/strong><\/p>\n\n\n\n The current debt ceiling debate is heating up\u2026and so is\nvolatility in the market, but don\u2019t panic! Instead of making hasty investment decisions, keep your eye on important\neconomic indicators with our just-released October Stock Market Outlook Report.\n<\/p>\n\n\n\n This report will help you make decisions based on data and\nfundamentals instead of fears and timing the market. This report contains some\nof our key forecasts to consider such as:<\/p>\n\n\n\n If you have $500,000 or more to invest and want to learn more about these forecasts, click on the link below to get your free report today!\u00a0 ______________________________________________________________________________<\/p>\n\n\n\n Some readers may recall the \u201cfiscal cliff\u201d scare back in\n2011, which was so down-to-the-wire that Standard & Poor’s lowered the\nU.S.\u2019s credit rating from AAA to AA. According to the Government Accountability\nOffice, the lowered credit rating cost U.S. taxpayers about $1.3 billion for\nthe fiscal year, which is small relative to total spending but still represents\nan avoidable cost. The stock market endured a real correction in 2011, falling\nsome -19% from the intra-year peak but ultimately finishing flat for the\ncalendar year and rising +13% in 2012. <\/p>\n\n\n\n Then in 2013 many readers likely remember the U.S. government\nshutdown that lasted 16 days (from October 1 to October 17). In that year, the\ngovernment failed to appropriate funds for the fiscal year 2014 nor were they\nable to pass a continuing resolution to supply financing for government\nobligations. <\/p>\n\n\n\n Eventually \u2013 and as they always have \u2013 Congress passed a\nbill funding the government and raising the debt ceiling, but the process for\ngetting there was politically fraught. Despite the very public debate and\npolitical infighting, the stock market (S&P 500 index) did not react much\nat all. As you can see in the chart below, the S&P 500 pulled back slightly\nbut did not waver from its overall upward trend for the year. The index\nfinished up +30%.3<\/sup><\/p>\n\n\n\n The debt ceiling issue is nothing new, and Congress has gone\ndown to the wire with the issue before. Despite political tension, 11th<\/sup>-hour\ndeals have always found a way to get done. While it appears that the politics\nhas gotten uglier and more hostile over the years, I do not foresee a scenario\nwhere the U.S. government would be allowed to default on its debt \u2013 such an\noutcome benefits no one and would only serve to disrupt financial markets and\nraise borrowing costs.<\/p>\n\n\n\n The impact on the equity markets in 2021 may just depend on\nhow far Congress lets the issue go, with the worst-case scenario being the\nTreasury running out of cash and missing payments on existing obligations (\u201cX\nDate\u201d). The Treasury estimates the X Date could fall somewhere between October\n15 and November 4, so at the very latest Congress needs to act by then. <\/p>\n\n\n\n Bottom Line for Investors <\/strong><\/p>\n\n\n\n For\ninvestors, the uncertainty surrounding the debate could lead to some short-term\nvolatility, but I do not believe the medium to longer-term trajectory of the\nmarkets or the economy should be seriously affected. We\u2019re still on a strong\npath of growth, in my view, and corporate earnings should not be materially\naffected by a political process. <\/p>\n\n\n\n To\nkeep your investments on track during turbulent times, we recommend that you\nfocus on the fundamentals and facts that can positively impact your investments\nin the long term.<\/p>\n\n\n\n
IT\u2019S FREE.\u00a0Download the Just-Released October 2021 Stock Market Outlook<\/a>2<\/a><\/sup><\/strong><\/p>\n\n\n\n![\"\"](\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2022\/02\/3_pic1-1024x395.png\")