Uncertainty is the Default Position

The S&P 500 index fell 1.7% last Monday, recovering most of its losses over the next few days. While there are several possible reasons for recent volatility, we focus on two stories making headlines.

First, the Chinese property developer Evergrande Group is experiencing a liquidity crisis as bond payments come due. Concerns of a broader fallout are rattling international markets.

Second, the U.S. Department of the Treasury will need Congress to raise the so-called debt ceiling to continue paying its obligations. While Congress has acted 78 separate times since the 1960s to permanently raise, temporarily extend, or revise the definition of the debt limit, the debt-ceiling deadline always brings uncertainty.

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