Wall Street takes the sequester in stride
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Last year when it looked like the U.S. would go over the fiscal cliff, the Dow Jones industrial average lost more than 1,000 points in about a month. Two years ago in the lead up to the debt ceiling debacle, the Dow lost almost 2,000 points in a month. But today, two days away from the sequester, the Dow is pretty much right where it was a month ago.
So why is Wall Street seemingly unfazed by Washington’s latest fiscal deadline?
“If you are looking at any market of $20 trillion worth of value, and you have an $85 billion sequester that may or may not actually happen, it’s very hard to say that should be the driving factor in the market,” says Allan Sloan, senior editor-at-large at Fortune Magazine.
But according to Sloan, just because the sequester hasn’t had a visible impact on the Dow doesn’t mean investors and corporate America aren’t taking note. Businesses are watching and waiting for a sign of what’s to come in the long-term.
“Corporate America wants some sort of predictability, stability and knowing what the rules are, even if they don’t like the rules,” says Sloan.
To hear more about Wall Street’s reaction to the sequester, click on the audio player above.