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Budget Bill The New “Headline Risk” For Stocks


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Have you ever heard the expression, “It’s a headline risk for the markets?”
Headline risk is the chance that an unsettling news event–anticipated or a
surprise–can add volatility to the financial markets.

Be prepared for some “headline risk” in as Congress looks to pass a
budget bill by October for the 2024 fiscal year.

The Senate has completed much of its work for the new federal spending
plan, but the House of Representatives still has a lot of work to do and only
a tiny window of time to complete it. A short-term bill was passed
yesterday, as we point our eyes to a new deadline at the end of October.

Headline risk is nothing new. The market was on pins and needles for
several weeks in August, building up to Fed Chair Powell’s Jackson Hole
speech. And it seems like the market “holds its breath” every month before
each inflation update.

Nobody wants a repeat of May 2023, when lawmakers engaged in highprofile,
high-stakes talks over the debt ceiling. The stock market was held
captive to the ebb and flow of updates, falling when talks faltered and
rising when an agreement seemed near.

The hope is that lawmakers will come to a resolution with little drama this
time around, with the memory of the debt ceiling talks fresh on Wall
Street’s mind.

Mark Reimet, CFP®
Ocean City Financial Group
Mark Reimet, CFP®

Ocean City Financial Group

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