The Potential Impact of the Debt Ceiling Debate on Equity Prices:

U.S. Treasuries In Focus As Economic Numbers Weaken.

The debt ceiling debate could have an impact on the major averages if investors feel negative sentiment toward buying equities. New analysis is being considered by investors and political analysts that suggests the recent decline in stock prices may be caused by issues related to Washington. The debate between Republicans and Democrats about the debt ceiling has been a trending topic has new possible repercussions as the economy falters.

Treasury Prices May Help Tell The Story

Jobless claims are up, GDP wasn’t revised upward for the first quarter of 2011 at 1.8 percent and the outlook on the economy remains weak compared to a few months ago.  It is expected that the debt ceiling will rise but this has become a political hot-button issue as the economy continues to stagger.  In the short run, U.S. treasury prices will be in focus while investors monitor the major averages to gauge political risk from the debt ceiling issue.