The market doesn't like the new budget deal -- because it might be good news.
Bad news is bad news until good news becomes bad news.
That pretty much sums up the markets as of late. Case in point: When a budget deal between Republicans in the House of Representatives and Democrats in the Senate was first announced earlier this week, stocks dropped from their near-record highs. After peaking above 1,811 on Monday, the benchmark S&P 500 index closed Thursday at 1,775.50.
To be sure, the budget deal wasn't much of a radical change, even though it was the first deal cut by a divided congress in three decades; it reversed cuts implemented during the "sequestration" by only $45 billion to $1.012 trillion in 2014. A summary of the deal touted that "the agreement would reduce the deficit by between $20 and $23 billion."
To put it in perspective, the projected deficit was expected to be $750 billion in 2014 before the deal. That means thatRead More »from Why the budget deal is beating up stocks