Stocks Closed Mixed, Debt Ceiling Uncertainty Hangs Over The Market

Plus 5 Just-Added Strong Buys Stocks Closed Mixed, Debt Ceiling Uncertainty Hangs Over The Market [Kevin Matras - EVP - Photo] Profit from the Pros By Kevin Matras Executive Vice President Stocks Closed Mixed, Debt Ceiling Uncertainty Hangs Over The Market [Stocks Closed Mixed, Debt Ceiling Uncertainty Hangs Over The Market]Image: Bigstock Stocks closed mixed yesterday with the Dow down modestly, the S&P essentially flat (up 0.02%), and the Nasdaq up modestly. The small-cap Russell 2000, however, was up 1.22%. There's a gap above the market on the S&P at 4,218.70, and on the Nasdaq at 12,873.49. That's just 0.62% away for the S&P, and 1.19% away for the Nasdaq. Those gaps have been acting like a magnet. So watch those levels. The debt ceiling will continue to be an issue as we get closer to the X date, i.e., the date when the Treasury runs out of money. And that's estimated to be June 1, although some have put estimates at possibly June 7 or 8. Either way, the deadline is fast approaching. And the markets are going to want to see some progress. As I wrote previously, it's almost unimaginable to think Congress would default. It would be a catastrophic mistake that would severely raise the cost of servicing our debts in the future. And there would be no political winners. That being said, the market seems to be acting like a deal will get done eventually. And that's because since 1960, there's been 78 times that Congress has raised the debt ceiling without defaulting. There's bound to be more volatility as that date approaches. And they almost always seem to go to the last minute (or slightly beyond). But again, the market appears to be betting that a deal will get done. And with a 100% track record of raising the debt ceiling over the last 60 years, it's probably the right bet. We shall see. There was not much on the docket yesterday in terms of economic reports. But today we'll get the PMI Composite report, New Home Sales, and the Richmond Fed Manufacturing Index. We'll also get more earnings. Even though earnings season is nearly over, we'll still get another 566 companies set to report between today and the end of the week. The most anticipated names coming out are Nvidia and Splunk on Wednesday; and then RH (Restoration Hardware), Costco, Best Buy, Ulta Beauty, and Dollar Tree on Thursday. In the meantime, the debt ceiling drama will likely grab most of the headlines. And be sure to watch the overhead gaps on the S&P and Nasdaq. As the saying goes, 'all gaps are filled.' While that's not 100% true, it's pretty close. The key is what happens afterwards? Do they fill it in and then head back down? Or fill it in and then keep going higher on their way to making higher YTD highs? Or not fill it at all? For now, stocks are trending up. And as that saying goes, 'the trend is your friend.' And that's been true so far this year. 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