Connect with us

Hi, what are you looking for?


3 weeks away from a possible default, should you buy or sell US stocks?

US stocks have been in consolidation mode lately. By lately, one should think of several months, as, for instance, the Dow Jones trades around the same levels as it did in November 2022.

Plenty of things happened in the last five months, yet stocks do nothing. As it turns out, investors, especially retail ones, are worried and pessimistic about US stocks. After all, if a recession is imminent, why buy stocks? Also, with high interest rates, why risk and invest in the stock market?

The truth is that there is always something to worry about. The latest thing keeping investors away from the stock market is the debt ceiling and the possibility of a US default less than three weeks away.

According to Jenet Yellen, the US Treasury Secretary, a failure to raise the debt ceiling on time would be catastrophic. Also, Jerome Powell, the Fed’s Chair, used similar words at the latest FOMC press conference.

So, with the United States only three weeks away from a possible default, should you buy or sell US stocks?

The debt ceiling was always increased in the end

Investors have all the reasons to worry. History tells us that in 2011, when the debt ceiling was eventually lifted after intense negotiations, the stock market registered one of the most volatile weeks in history. For instance, the S&P 500 fell 19% in just three weeks.

But history also tells us that the debt ceiling has always been raised in time. More precisely, it was raised 89 times in the past under both a Republican and a Democratic Congress. Hence, the chances are that a default would be avoided again, as was the case so many times.

Stocks are not in such a bad shape

Market participants have heard lately that only a few stocks keep the market up. Unfortunately, that is far from the truth.

In fact, a diverse number of companies from different industries and sectors are less than 5% from a new 52-weeks high.

Therefore, if anything, buyers keep investing and believe that the debt ceiling fears are temporary. The US will deliver, as it did so many times in the past.  

The post 3 weeks away from a possible default, should you buy or sell US stocks? appeared first on Invezz.

Enter Your Information Below To Receive Free Trading Ideas, Latest News And Articles.

    Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

    You May Also Like

    Latest News

    Rep. Jennifer Wexton (D-Va.) announced on Tuesday that she has been diagnosed with Parkinson’s Disease. “If there’s one thing that Democrats and Republicans can...

    Latest News

    After Dianne Feinstein announced she’d contracted the shingles in early March, her staff said she planned to return to the Senate within a matter...


    A U.S. District Court judge has ruled that Elizabeth Holmes, founder and CEO of the disgraced blood-testing company Theranos, cannot remain free on bail...

    Latest News

    SEOUL, South Korea — When a group of American lawmakers arrived in South Korea for meetings with government and military officials, President Yoon Suk-yeol...

    Disclaimer:, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2022 All Rights Reserved.