James Dennin, Kapitall: With the market stabilizing despite the shutdown, we decided to look at stocks reporting earnings next week.
Stocks are recovering as we move into the end of the week. One theory is that analysts are comforted by the recent appointment of Janet Yellen to take over for Ben Bernanke as the Federal Reserve Chair. Her "dovish" policies will likely ensure the Fed will not begin tapering any time soon, one explanation for the more positive trends in the market lately.
[Read more on the Shutdown from Kapitall: Does Anyone Benefit from the Shutdown: 4 Chinese Stocks to Watch]
Another theory is that analysts are increasingly skeptical that Republicans will continue to insist on concessions on Obamacare before raising the debt ceiling – although there's reason to believe that some members of the GOP are less likely to listen to corporate interests than they were in years past.If the debt ceiling is reached, speculation varies as to what the ramifications would be. A default could be akin to the liquidity crisis that wreaked havoc on financial markets in 2008 - when the Dow Jones Index plunged over 700 points in a single day. Others are saying the default would be a good thing. The reality is probably somewhere in the middle, as the Treasury would still have enough cash after the debt ceiling is reached to fund its operations for about a week, maybe more. Either way, the debt debate in Washington is being closely followed by the markets. And it probably doesn't help that all of this uncertainty is coinciding with the next quarterly earnings season. Investing ideas We decided to run a screen on stocks reporting earnings next week. Starting in that universe, we narrowed the search to dividend stocks, so investors can make money even if prices dip, as more DC drama plays out.
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