Will a Debt Deal Snap Back the Market? Analysts Debate

In the midst of stalled debt talksinching closer to the Aug. 2 deadline when the federal government will run out of money to pay its bills, analysts are split over how the market will react—even if a debt deal is inked in time.

Debt Talks Influence Currencies & Stocks   

Despite the lingering threat of a downgrade of the U.S.' AAA credit rating, "If we get a deal... you're going to see the stock market snap back," said Philip Streible, senior market strategist for Lind-Waldock.

But Boris Schlossberg, director of currency research for GFT Forex, said even after if a deal happens, afterward, "the focus goes back to the economic basics and...the economy looks very poor."

Schlossberg pointed to the high unemploymentrate, which he thinks will remain above 9 percent even six months from now, with no "significant movement."

He added that "we're making a big assumption that we're going to be able to make a deal here."

Streible said a potential downgrade—a likely scenario without a deal—has already been factored into the market, citing gold's easing off of its recent record high.

_____________________________
CNBC Data Pages:

_____________________________

Disclaimer