[Altos Weekly Traders Edge] Surviving the Debt-Ceiling Drama..Details Inside

The Most Powerful Patterns in the Stock Market These 5 unique patterns have proven to be incredibly historically accurate. Most investors have no idea which price patterns work and which don’t… And it may SHOCK you when you see which one performs best. [LEARN THIS TODAY]( By clicking the link above you agree to periodic updates from WealthPress and its partners ([privacy policy]( Trader's Handbook: Surviving the Debt-Ceiling Drama Weekly Market Overview As the U.S. debt ceiling re-emerges in the news cycle and the deadline looms, the escalating political theatrics and intense media coverage are poised to amplify. For investors, the unpredictability stemming from Washington's brinkmanship raises pressing questions about the future. How does the debt ceiling impact markets? What are the repercussions of a U.S. credit rating downgrade, or worse, a default? How should investors react amid such conflict? Markets invariably exhibit an aversion to uncertainty. However, investors may find some solace in the fact that this is not uncharted territory. Historical precedents may offer valuable insights. First, let's clarify what the debt ceiling is. It's a legislative limit on the national debt that the U.S. Treasury can accrue, thereby mitigating the risk of a public debt crisis. The Treasury sells bonds, effectively issuing new debt, to investors worldwide to meet its obligations, such as paying military wages, retirement benefits, and interest on the national debt. Because the U.S. government typically incurs budget deficits, the debt ceiling requires periodic elevation to facilitate further borrowing. Hence, the national debt rises. The issue is that the debt ceiling, currently $31.4 trillion, is a nominal figure that demands constant revision in line with economic growth. \So, what transpires when we reach the debt ceiling? One might assume that breaching this limit would necessitate immediate action. However, this isn't quite the case. If the debt limit isn't raised, the Treasury employs "extraordinary measures" to temporarily maintain government operations under the borrowing limit, primarily by suspending investments in certain government funds. This strategy creates additional space beneath the debt cap, permitting the Treasury to borrow more publicly. The risk lies in the possibility of failing to agree on a new limit, potentially leading to a technical default of the U.S. government. It's important to note that much of the discourse surrounding the debt ceiling is political posturing. While the potential outcomes remain speculative, historical data may offer a modicum of clarity. The debt ceiling has been regularly adjusted, with every president since Dwight D. Eisenhower in 1959 contributing to this tally. There have been 89 increases to the debt ceiling in the last 60-plus years, highlighting the cyclical nature of this occurrence. In 2011, the U.S. credit rating suffered a downgrade by Standard & Poor’s, marking a critical moment for the markets. Predictions suggested higher borrowing costs for the U.S. government, businesses, and consumers. However, contrary to expectations, bond prices rallied as interest rates declined. Stock markets experienced short-term volatility, with the S&P 500 eventually climbing by nearly 20% a year later. In the event of a government default, the Treasury would likely prioritize its obligations while curtailing discretionary expenditures. Although this scenario might incite economic instability and market volatility, history suggests a compromise is the likelier outcome. Much of the contention surrounding the debt ceiling revolves around the U.S.'s outstanding debt, which has doubled over the past decade, reaching approximately $31 trillion. However, when viewed in context, such as the percentage of GDP spent on interest payments, the U.S. debt burden appears less daunting. Despite the increase in debt, interest payments are significantly lower today than in the 1980s or 1990s. For investors, the importance of the debt ceiling hinges on their investment horizon. For short-term investors, the debt ceiling's fluctuations may significantly influence market trends. However, for long-term investors, the instances where the U.S. nears its debt ceiling are mere footnotes in market history. Instead, the focus should remain on long-term investments, while anticipating potential short-term disruptions. It's vital to remember that investors should focus on what they can control: setting goals, maintaining asset allocations, controlling costs, and managing emotions. The political process surrounding the debt ceiling may be fascinating, but from an investment perspective, it remains an uncontrollable factor and thus should be relegated to the sidelines. Consequently, even in the face of potential tumult, making the right, albeit mundane, decisions can have substantial implications for investors in the long run. If you missed yesterday's free market overview, Jeff and Richard went over a litany of great topics including - Mapping our Key Levels - Probability of Profit - Share your favorite symbol - The most transparent and in-depth Q&A in the industry Click the button below to see the recorded version and don't forget that the weekly market overview is FREE to attend every Tuesday night. The only interactive market overview in the industry complete with Q&A and no sales pitch! Just hard-core market chat and education, 100% free! [TAKE ME TO THE MARKET OVERVIEW (FREE VIDEO)]( Sponsored [Urgent: Top 7 AI Stocks to Watch and Profit from in 2023]( Time is of the essence in the stock market, and we have an urgent message for you. The AI revolution is here, and it's happening right now. 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Altos Trading, including its owner, does not participate in any trades issued through the alert services. Subscribers to Altos Trading or any other persons who buy, sell or hold securities should do so with caution and consult with a broker or investment adviser before doing so. Trading securities and options involves risk. Prior to buying or selling an option, an investor must receive a copy of Characteristics and Risks of Standardized Options. Investors need a broker to trade securities and options, and must meet suitability requirements. Past results are not necessarily indicative of future performance. Performance figures are based on actual recommendations. Due to the time critical nature of trading, brokerage fees, and the activity of other subscribers, there is no guarantee that subscribers will mirror the performance of the service. Performance numbers shown are based on trades subscribers could enter based on the trade alerts. 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