(NEW YORK) — U.S. stock markets opened lower Monday morning on news that no deal to reopen the government or raise the debt ceiling was reached in Washington over the weekend.
“Right now what you’re seeing is kind of a game of cat and mouse,” says Art Cashin, a UBS Financial economist. “The rally last week re-enforced the idea that people want to buy the dip, but if you’re a buyer, you want to play hard to get.”
Cashin adds the markets will continue to sink leading up to the deadline. He says some buyers might be willing to buy, but they’re “standing back to see if the prices will get cheaper,” and sellers don’t want “to sell into a vacuum.”
Still, Cashin says, most investors are hedging that the U.S. government will not default on its debt in the end.
“Given past history, there is likelihood that they will reach a deal, but at the very least it’s a 50-50 bet, and that’s why I think shareholders might be better served sitting it out and waiting to see how things develop,” he says.
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