Market Digest \u2013 Week Ending 10\/18\r\n\r\nThere was nothing inspiring about the deferment the debt ceiling, but capital markets staged a relief rally anyway. Early Thursday, a bill was passed which pushes the debt ceiling out to early 2104 and reopens the parts of the government that were shutdown. Stocks and bonds rose as the worst case scenario was avoided.\r\n\r\nWeekly Returns:\r\n\r\nS&P 500: 1,745 (+2.4%)\r\nFTSE All-World ex-US: (+2.3%)\r\nUS 10 Year Treasury Yield: 2.59% (-.09%)\r\nGold: $1,316 (+0.5%)\r\nUSD\/EUR: $1.369 (+1.0%)\r\n\r\nMajor Events:\u00a0\u00a0\u00a0 \r\n\r\n \tMonday \u2013 Senate leaders said they were close to an agreement to reopen the federal government and avoid a debt default.\r\n \tTuesday - Fitch Ratings Service put the U.S. credit rating on negative watch.\r\n \tWednesday \u2013 Congress passed a bill reopening the government though January 15th and suspending the debt ceiling until at least February 7th.\r\n \tThursday \u2013 Google released better than expected earnings and revenues. Shares rose, passing the $1,000 mark for the first time.\r\n \tFriday - J.P. Morgan reached a tentative $4 billion settlement agreement related to mortgages it sold during the housing boom.\r\n\r\nOur Take: \r\n\r\nThe deal to raise the debt ceiling wasn\u2019t great, but it wasn\u2019t bad either. At first glance, it sets up a repeat the whole debacle again early next year. But there are a few provisions which offer hope for a better experience. Part of the agreement appoints a bipartisan committee to negotiate future spending levels before the next deadline. It is hard to be too optimistic about this, but you never know. Also, the bill allows the Treasury to use \u201cemergency measures\u201d which reduce the chance of default if Congress again struggles to agree on a deal.\r\n\r\nProbably more important, the Republican Party in general suffered real damage to its image. It isn\u2019t clear leadership can control the more extreme members, but they will certainly try a different approach next time. After all, mid-term elections are creeping up.\r\n\r\nSince almost no one expected default to happen, we\u2019re a bit surprised stocks rose as much as they did this week. But for what seems like the first time in a while, there is no immediate major threat restraining prices. The debt ceiling, European debt crisis and turmoil in the Middle East haven\u2019t gone away. But at least for the weekend, none seem imminently problematic. Let\u2019s enjoy it.