logo  
Sign in or Register

Already a member?

Sign in

Or sign in with your account on:

Not a member yet?

Register
    

Equities ETFs Nosedive on Potential US Debt Fight

By  +Follow October 3, 2013 6:11AM
Share:
Tickers Mentioned:

Equities ETFs plunged alongside the markets on Thursday morning as dire predictions about the consequences of another fight over the debt ceiling, paired with the continued government shutdown, led to a major sell-off. This took major ETFs that track equities with them, with the SPDR S&P 500 ($SPY) falling as much as 1.3 percent by noon. However, news that John Boehner has reportedly told Republican members of congress that he’ll be willing to forego the “Hastert Rule” (the informal agreement that no bill will be brought to the floor of the house without a majority of Republican votes) to avoid a default sparked an early afternoon rally that took losses back down to just over 0.75 percent.

Treasury: Default on National Debt Could Cause Stock Market Crash, Recession

The Treasury Department has been making a string of warnings to congress in hopes of preventing another difficult battle over the debt ceiling. The last extended fight ultimately resulted in a downgrade of American debt and a major decline in the equities market. Today, the department released a report highlighting what it viewed as a potential “catastrophe.”

“Not only might the economic consequences of default be profound, those consequences, including high interest rates, reduced investment, higher debt payments, and slow economic growth, could last for more than a generation,” the report said.

“In the event that a debt limit impasse were to lead to a default, it could have a catastrophic effect on not just financial markets but also on job creation, consumer spending and economic growth -- with many private-sector analysts believing that it would lead to events of the magnitude of late 2008 or worse, and the result then was a recession more severe than any seen since the Great Depression.”

Treasury Secretary Jack Lew joined the chorus, urging congress not to delay action.

‘‘As we saw two years ago, prolonged uncertainty over whether our nation will pay its bills in full and on time hurts our economy,’’ Lew said in a statement. ‘‘Postponing a debt ceiling increase to the very last minute is exactly what our economy does not need — a self-inflicted wound harming families and businesses.’’

Equities ETFs, Return on US Debt Fall

In a classic example of skewed market logic, the concern over the potential for the United States defaulting on government debt had investors scrambling to buy more government debt. While stocks slid, investors looking to reduce risk have been buying bonds, with the yield on 10-year T-notes falling 3 basis points to 2.6 percent yesterday.

Other ETFs tracking the equities market were on the move with a high trading volume. The iShares Russell 2000 Index ($IWM) was off almost 1.25 percent, the Select Sector Financial Slct Str SPDR ($XLF) lost about 0.75 percent, and the Direxion Daily Small Cap Bear 3X Shares ($TZA) was up over 3 percent. Also making big moves were ETFs tracking volatility in the stock market, with the iPath S&P 500 VIX Short Term Futures (VXX) gaining almost 2.5 percent and the VelocityShares Daily Inverse VIX Short Term ETN (XIV) shedding just over 2.5 percent.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


Liked What You Read? Join Equities.com as a contributor and get eyeballs on your content FOR FREE!

Results for SPY
Arthur Kolayan
31 Jan 15 23:39:13
RT @StockTwits: The cycles of euphoria. Demonstrated on a simple chart. Shared by @JackDamn -> http://t.co/QiFk4IJo8S $SPY http://t.co/y8l0…
OM_giveaways
31 Jan 15 23:36:09
Top 5 Stocks of 2015 Free HD Video!!!! $GOOGL $AAPL $TSLA $SSYS $VXX $VIX $SPY $SPX #stocks http://t.co/vG4ZFnz7JJ http://t.co/17ylMAbQHm
CryptoCryptics
31 Jan 15 23:35:01
RT @StockTwits: The cycles of euphoria. Demonstrated on a simple chart. Shared by @JackDamn -> http://t.co/QiFk4IJo8S $SPY http://t.co/y8l0…
Jason Olive
31 Jan 15 23:30:50
RT @SeekingAlpha: Weighing The Week Ahead: Will The Data Landslide Reveal Economic Weakness? http://t.co/owfIzV6ilg $DIA $SPY $QQQ $IWM
Fractal Long
31 Jan 15 23:30:43
What is the $SPY going to do next? Get real time alerts and analysis at http://t.co/RiPdjOCe6l
Kenny
31 Jan 15 23:30:28
RT @alphatrends: January Barometer Gives Notice $SPY $DIA $QQQ http://t.co/W9m9Wn9Uxo
Paul Olson
31 Jan 15 23:24:47
RT @StockTwits: The cycles of euphoria. Demonstrated on a simple chart. Shared by @JackDamn -> http://t.co/QiFk4IJo8S $SPY http://t.co/y8l0…
Alysia Sarkisian
31 Jan 15 23:21:01
RT @SeekingAlpha: Weighing The Week Ahead: Will The Data Landslide Reveal Economic Weakness? http://t.co/owfIzV6ilg $DIA $SPY $QQQ $IWM
Marsol International
31 Jan 15 23:17:18
RT @StockTwits: This chart from @_SeanDavid shows what happened Friday. Oil jumped. Stocks dropped. http://t.co/voJFDO2jBu $USO $SPY http:/…
Seeking Alpha
31 Jan 15 23:14:42
Weighing The Week Ahead: Will The Data Landslide Reveal Economic Weakness? http://t.co/owfIzV6ilg $DIA $SPY $QQQ $IWM
David Pinsen
31 Jan 15 23:11:08
RT @PortfolioArmor: MT @StockTwits: A gloomy outlook for stocks. http://t.co/NT0sj0Kd3r $SPY $SPX http://t.co/6pOcFoyNul
royfberger
31 Jan 15 23:05:08
Throw a trading dog a bone! $MSFT $SPY $F $AAPL $HYG $IMAX $RIG $YHOO $USO $HUN http://t.co/iSJgoPHA0z http://t.co/E5aH2fN8y8
Bradley
31 Jan 15 22:51:06
Free Video Tutorial #psychology of #trading http://t.co/th4YrVqgyg $TLT $TNA $QQQ $SPY $GPRO $GOOG $AAPL http://t.co/StgxuHUsJ2
Ani Anirudhan
31 Jan 15 22:44:14
$SPY will test support below, technicals weak https://t.co/7aPFVEESY9 via http://t.co/11Wpwa7jZF
Andreas Wolf
31 Jan 15 22:42:40
I highly recommend you guys buy some Nike Roshe Run shoes. There only like $80 and there the most comfortable shoes I've ever bought. $SPY
Forex First Aids
31 Jan 15 22:31:15
RT @derivatrader: GM and China’s SAIC to push into Indonesia with no-frills vans: BEIJING (Reuters) - General Mot... http://t.co/dXz6SSHI82…
Trading Fractals
31 Jan 15 22:29:54
What is the $SPY going to do next? Get real time alerts and analysis at http://t.co/BZW8URokd7
PrivateCapBlogger
31 Jan 15 22:27:33
Companies most bearish on earnings outlooks sinc... $SPY $IVE $SH $SSO $SDS $VOO $IVV $SPXU $UPRO $SPXL $RSP http://t.co/ct7GEfoH15
TalkMarkets
31 Jan 15 22:25:49
Is The Dollar's Momentum Easing? Is Deeper Pullback In The Stock Market Likely? $SPY $JYN $FXB $FXF $FXC $FXA $TLH http://t.co/weDS8B0fJY
Options Trader
31 Jan 15 22:24:46
GM and China’s SAIC to push into Indonesia with no-frills vans: BEIJING (Reuters) - General Mot... http://t.co/dXz6SSHI82 $SPY $QQQ $IWM
Inside Stock Alerts
31 Jan 15 22:24:46
GM and China’s SAIC to push into Indonesia with no-frills vans: BEIJING (Reuters) - General Mot... http://t.co/czWJiwRpT1 $SPY $QQQ $IWM
Jason Olive
31 Jan 15 22:20:11
RT @SeekingAlpha: The Bull In Winter http://t.co/tTsa9RdghA $ACWX $DBA $DBB $DBC $DBE $EEM $EFA $EWJ $FXI $GLD $IWD $SDY $SLV $SPY $UUP $XL…
GonnaGetUgly
31 Jan 15 22:18:34
RT @StockTwits: The notes on this chart paint an extremely gloomy outlook for stocks. http://t.co/PBk7BXyCPg $SPY $SPX http://t.co/FaN9dGDw…
Alysia Sarkisian
31 Jan 15 22:07:42
RT @SeekingAlpha: The Bull In Winter http://t.co/tTsa9RdghA $ACWX $DBA $DBB $DBC $DBE $EEM $EFA $EWJ $FXI $GLD $IWD $SDY $SLV $SPY $UUP $XL…
gokay
31 Jan 15 22:05:52
RT @StockTwits: The cycles of euphoria. Demonstrated on a simple chart. Shared by @JackDamn -> http://t.co/QiFk4IJo8S $SPY http://t.co/y8l0…
Seeking Alpha
31 Jan 15 22:05:15
The Bull In Winter http://t.co/tTsa9RdghA $ACWX $DBA $DBB $DBC $DBE $EEM $EFA $EWJ $FXI $GLD $IWD $SDY $SLV $SPY $UUP $XLP $XLU
Marc
31 Jan 15 22:03:57
RT @FatCat_Banker: $UVXY Closes over 200 for 2nd time in 11 trading days - the first times since inception $SPY http://t.co/xDArJZxvgu
BuckarooTrades
31 Jan 15 21:48:40
Some very smart traders with many more years experience than I have are looking at October lows on $SPY as a possibility by April. Wow.
Tim
31 Jan 15 21:47:53
Concerned about the market for the next coming weeks. First Time since May 2012 the bear market indicator has crossed my threshold $SPX $SPY
John Ross
31 Jan 15 21:47:38
$UVXY Closes over 200 for 2nd time in 11 trading days - the first times since inception $SPY http://t.co/xDArJZxvgu
ZTradeCZAR
31 Jan 15 21:43:54
Trade Plans for 2-2 posted:http://t.co/IrnHeheccs $YHOO $GURE $IMGN $CPRX +6 more $SPY $APPL $TWTR $FB $LNKD #trade #stocks #money #finance
BuckarooTrades
31 Jan 15 21:42:07
To avoid the occasional self-sabotage of giving back all that I just made, I'm not trading much this week. I'm only swinging $SPY $QQQ puts.
StockNewsWires
31 Jan 15 21:38:04
$SPY $DIA $QQQ $IWM: Experts: Expect a good, but volatile year – CNBC: http://t.co/97KnxfFDid
Baidu Planet ●
31 Jan 15 21:32:40
RT @BoomDoomEconomy: #USA GDP +2.6% in Q4, +5.0% in Q3 http://t.co/kQQEBTD0Jv #economy $SPY $DIA $IWM $QQQ http://t.co/NHgQNQKxTt
Apple Reporter ●
31 Jan 15 21:30:46
RT @BoomDoomEconomy: #USA GDP +2.6% in Q4, +5.0% in Q3 http://t.co/kQQEBTD0Jv #economy $SPY $DIA $IWM $QQQ http://t.co/NHgQNQKxTt
Google Investor ♦
31 Jan 15 21:30:25
RT @BoomDoomEconomy: #USA GDP +2.6% in Q4, +5.0% in Q3 http://t.co/kQQEBTD0Jv #economy $SPY $DIA $IWM $QQQ http://t.co/NHgQNQKxTt
TheClosingBell
31 Jan 15 21:29:47
The Closing Bell is out! http://t.co/Rjl5ycrJHn $EURUSD $GBPUSD $USDJPY $AUDUSD $SPY $TWTR $GPRO $YHOO $LNKD $FB $AAPL $BRD $CAT $WLT $LNKD
Matrix Control ‹‹‹
31 Jan 15 21:29:23
RT @BoomDoomEconomy: #USA GDP +2.6% in Q4, +5.0% in Q3 http://t.co/kQQEBTD0Jv #economy $SPY $DIA $IWM $QQQ http://t.co/NHgQNQKxTt
Matrix Markets $
31 Jan 15 21:29:00
RT @BoomDoomEconomy: #USA GDP +2.6% in Q4, +5.0% in Q3 http://t.co/kQQEBTD0Jv #economy $SPY $DIA $IWM $QQQ http://t.co/NHgQNQKxTt
hft info
31 Jan 15 21:27:53
RT @KirkKornegay: @DanZanger @SJosephBurns too bad #HFT has ruined this type of trading - momentum gone $SPY $QQQ
Real News *
31 Jan 15 21:26:59
RT @BoomDoomEconomy: #USA GDP +2.6% in Q4, +5.0% in Q3 http://t.co/kQQEBTD0Jv #economy $SPY $DIA $IWM $QQQ http://t.co/NHgQNQKxTt
Financial Controls ۩
31 Jan 15 21:26:37
RT @BoomDoomEconomy: #USA GDP +2.6% in Q4, +5.0% in Q3 http://t.co/kQQEBTD0Jv #economy $SPY $DIA $IWM $QQQ http://t.co/NHgQNQKxTt
Osprey Flyer ^v^
31 Jan 15 21:26:07
RT @BoomDoomEconomy: #USA GDP +2.6% in Q4, +5.0% in Q3 http://t.co/kQQEBTD0Jv #economy $SPY $DIA $IWM $QQQ http://t.co/NHgQNQKxTt
Boom Doom Economy ♦
31 Jan 15 21:25:27
#USA GDP +2.6% in Q4, +5.0% in Q3 http://t.co/kQQEBTD0Jv #economy $SPY $DIA $IWM $QQQ http://t.co/NHgQNQKxTt
Rancher Rick
31 Jan 15 21:21:35
RT @StockTwits: The notes on this chart paint an extremely gloomy outlook for stocks. http://t.co/PBk7BXyCPg $SPY $SPX http://t.co/FaN9dGDw…
None Ya
31 Jan 15 21:18:10
RT @KevinBCook: $SPY Volume DISTRIBUTION: Jan's 20 trading days saw 11/12 DOWN days at/above 90-day rising avg of 120-140mln shrs & only 6/…
Edward Good
31 Jan 15 21:08:05
RT @StockTwits: The notes on this chart paint an extremely gloomy outlook for stocks. http://t.co/PBk7BXyCPg $SPY $SPX http://t.co/FaN9dGDw…
hft info
31 Jan 15 21:07:52
RT @wyzubedarola: Good Morning Traders!! Let’s rock n roll today, $SPY $VXX #HFT
Rahul Sonthalia
31 Jan 15 20:58:21
RT @StockTwits: The cycles of euphoria. Demonstrated on a simple chart. Shared by @JackDamn -> http://t.co/QiFk4IJo8S $SPY http://t.co/y8l0…
MagicDoug
31 Jan 15 20:56:50
RT @StockTwits: The cycles of euphoria. Demonstrated on a simple chart. Shared by @JackDamn -> http://t.co/QiFk4IJo8S $SPY http://t.co/y8l0…
				
				
By  +Follow October 3, 2013 6:11AM
Share:

Comments

 

blog comments powered by Disqus

About us

Equities.com is the most advanced interactive online social ecosystem for the financial industry, serving as a resource center and next-generation communication platform that connects self-directed investors with public issuers, market experts, and professional service providers and vendors. Registered members can leverage our exclusive proprietary research tools such as the Small-Cap Stars, which outperformed 90% of all small-cap mutual funds, and robust do-it-yourself E.V.A. research reports. The Equities.com Issuer Dashboard is the ideal tool to communicate and manage investor awareness campaigns to the investment community, as well as to access valuable resources to help your company grow.

Market Data powered by QuoteMedia.
Copyright © QuoteMedia. Data delayed 15 minutes unless otherwise indicated. Terms of Use.