While the circus in Washington played out during the day, US markets had another relatively low volume day as "Turnaround Tuesday" failed to manifest. The markets saw their third day in five with significant sell-offs in the last half hour. The last half hour of trading is when hedge fund redemptions are done and share buybacks are suspended. Another signal in a long list suggesting that sentiment has changed for the worse.
Paul Kasriel had an update on his ongoing monitoring of inflation expectations. They have seen a modest relative uptick over the last week, as the price of oil has risen considerably. We'll see how this develops over the next month or so. It's not possible to tell whether commodities have been bouncing due to feelings that the bailout will work and stimulate growth, or if it is due to the expansion of the government's total debt and inflation fears. If the plan gets rejected (which it may) do commodity prices collapse again?
Bennet Sedacca doesn't like the prospects for a rally before the end of the year. Jeff Saut thinks otherwise. One of them will be wrong.