Market update: US budget negotiations curb risk appetite – 25.09.2013

Source: Henderson Global Investors

Wall Street retreated for a fourth consecutive session, bruised by political wrangling at Capitol Hill (S&P 500 -0.3%; Dow Jones -0.4%). Congress is locked in a partisan dispute over the terms for funding the government for the fiscal year that starts on 1 October. The refusal by Senate Republican leaders to side with Tea Party demands has not removed the threat of a government shutdown. In light of these concerns, economic releases took more of a back seat. S&P/Case-Shiller’s Home Price Index, which tracks US property values in 20 metropolitan regions, rose 0.6% in July (seasonally adjusted), although this was below economists’ forecasts for a 0.8% gain. Separately, the US Conference Board’s consumer confidence index fell to 79.7 in September, its weakest level since May.

Overnight, Asian markets were generally weak. The Shanghai Composite fell 0.4%, despite the positive influence of confirmation that the Shanghai free trade zone will be opening later this month (29 September). European markets are following their global counterparts lower this morning (FTSE 100 -0.4%; FTSE Eurofirst 300 -0.4%) as US budget negotiations continue to curb risk appetite. Today’s data releases are dominated by the US – durable goods orders, mortgage applications, and new home sales data.