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Stocks Go Risk-On Despite Washington Turmoil

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Today's financial recap and tomorrow's financial outlook.

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The S&P 500 (INDEXSP:.INX) rose for just the third time in the past 12 days as investors continued to grapple with the impact of the US government shutdown.
Incidentally, the biggest news of the day was the fact that a key piece of news didn't happen. The widely watched monthly non-farm payrolls report from the Bureau of Labor Statistics was not released due to the aforementioned shutdown. Officials have not yet laid out a timetable for the dissemination of the numbers.
On the shutdown front, politicians on both sides of the aisle are still engaged in the same game of chicken ahead of the October 17 debt ceiling deadline.

However, Wall Street's general view is that the fight will be resolved soon in order to avoid a market-destroying default of US Treasuries, so there are some players positioning ahead of what seems like an inevitable compromise.
In stock news, shares of restaurant chain Potbelly (NASDAQ:PBPB) shot up a whopping 120% to $30.77 from the $14 price at which the IPO was set.
Social media names like Facebook (NASDAQ:FB) and Yelp (NASDAQ:YELP) were also in the spotlight after Twitter released its eagerly awaited S-1 IPO filing, which drove bullishness in the sector.
We also saw outperformance in the small-cap Russell 2000 (INDEXRUSSELL:RUT), strength in emerging markets bonds and stocks, and weakness in US Treasuries, indicating traders are more than comfortable ahead of what could be a turbulent next few days.
Between the constant flow of news coming out of Washington and the unpredictable timing of the jobs report release, we could most definitely see a volatility spike.

Monday's Financial Outlook
The official calendar for Monday is very light.
At 3:00 p.m. ET, the Federal Reserve will release its August Consumer Credit report. The most recent reading was $10.4 billion.
Tower Group (NASDAQ:TWGP) is the sole name reporting earnings on Monday.
On the international front, we will get Japan's Trade Balance and Leading Economic Index numbers, as well as the Eurozone Sentix Investor Confidence numbers.
However, as stated above, the dominant force in the market is the news flow out of Washington.

Twitter: @Minyanville

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No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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