Despite the S&P 500 being up over 20% for the year, there's still a lot that can go wrong these last 3 months. Of course, the potential US government shutdown is bad news, but don't forget the debt ceiling debate is also in play this month. There's also the Fed's decision on when to start tapering bond purchases, something the financial markets have been following very closely this year. Additionally, we have another round of corporate earnings right around the corner. Worse than expected earnings/outlooks could certainly hurt stocks. (Can any company's outlook possibly be positive with the huge political mess going on?) That doesn't even include international factors. Can China's growth continue? Is Europe's economy healing fast enough? Will further military action be required in the Middle East? Bottom line, the next 3 months could be interesting.
Another point to consider - would the Fed even dare to start tapering given the potential economic damage which could result from a government shutdown? I don't see the FOMC voting for any QE changes until the budget/debt ceiling issues are resolved.
If you strip out the fiscal tightening in the US the underlying private investment trend in the economy is tracking quite well. The Fed will only taper for the right reason and the market has had time to absorb the noise. I think the Australian market can continue to outperform the SP500 as it did in September Quarter.
all good points Jay and you know if the media gets hold of it any single one of those issues could be enough to sppok investors. Interesting/regular conversations starting to emerge about how the US can bring itself off the current stimulus without causing a dramatic knee jerk reaction.
a couple of balls in the air....