Market Expectations of Supercommittee Failure

Sheila Dharmarajan looks at possible reactions to failure to slash federal debt.
5:57 | 11/21/11

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Transcript for Market Expectations of Supercommittee Failure
Saddam -- and from Bloomberg TV Sheila Connecticut weekend. Stephanie AT and -- we've been talking this morning about the stalemate and the fiasco really eyewitness super committee in Washington do you expect this to weigh down. The Dow or was this expectation of failure already built into the markets. Let's take your party -- impact of this on the markets if you take a look at where we open right now we are -- across the board sit down across the board. -- is down by over 1% as well as the S&P 500 to you are seeing the impact. What's really weighing down on Wall Street investor's mind is what's happening on K street or perhaps -- -- what's not happening on K street. -- -- -- he talked about of course the debate being over the one trillion dollar in budget cuts that are supposed to happen here. We are expected to hear from the congressional super committee today that they cannot reach an agreement. That is really impacting the markets -- a big way -- remember that deadline is Thanksgiving -- there's a lot of work potentially to be done in -- the next couple of days. Out of Europe and China is also putting pressure on stocks here tell us about that. It's a trifecta of things that are affecting the markets is we talked about the US when you take a look at what's happening -- -- a couple of things still look the sovereign debt crises. Moody's now coming out and waiting a France's rising -- to perhaps a rating downgrade could happened accidentally Moody's. Decent -- -- that that could be a possibility -- the German finance ministry coming and seeing that they see expansion slowing down quite a bit so a lot of -- still about the yours and then finally moved what's happening is yet. The Japanese numbers -- export numbers have actually slowed. In China Chinese that's actually posted their biggest weekly decline that we've seen in a month a lot of concerns -- the effects of tightening. Market bringing in the property market bubble that could be happening there and the impact that is happening congress it really -- trifecta of what's happening in -- what's happening in Europe and what's happening right here at home. Impacting the markets in the big. Wade -- we're certainly seeing -- the first few minutes of trading here speaking of Asia she'll Warren Buffett's. Is in Japan today explain the significance of his trip. I think this is his first ever trip to Japan and -- certainly says a lot about what the billionaire investor perhaps thinks that the investment opportunities in Japan. Even though glancing that he -- has a lot of money that he wants to put this money and work. And perhaps Japan -- could be his next investment opportunity. He does things a lot of Japanese companies in investments there are undervalued -- also -- that the country has recovered remarkably well a lot of the issues that have happened over there over the past year most notably of course the earthquakes -- perhaps Warren Buffett could be putting some work into Japan Stephanie. Aren't people will be watching what he does there all right we'll be getting new members in about half an hour -- on existing home sales. We're expecting there. I wish I had more news to do more good news to give you that housing market but unfortunately scenes are still looking pretty grim there. Existing homes those numbers are expected to decline for the second -- right. The problem is. Buyers just don't wanna go there and put new money down on -- but it -- S home prices have fallen more than 30% since 2006 peak. The problem is even the prices have come down quite -- -- just aren't going into the combined. Moms they're still the pressure. Of the overall economy on their wallets and their incomes to the problem is against. Buys for these existing homes that -- and this is despite the fact that home prices have come down quite significantly this -- -- we talk about why did they still there in the housing market loud and clear. All right meanwhile airfares. Are up 6% this Thanksgiving what -- price hikes. You're actually traveling anywhere -- Thanksgiving but if you arguing going to be paying a little bit more for your ticket as -- at. Air prices have come up about 6% for those tickets for -- traveling over the Thanksgiving holiday what's basically happening here is that the airlines are cutting their capacities -- their removing a number of seats could be available. -- -- -- number of planes that could be available for flight. The one of the big reasons -- doing that is to maintain pricing power they want and the control over the prices to get an amazing he remembered there -- commenting a lot of weakness in the airline industry talked a lot less fuel costs and gas cuts. -- in -- to -- that they're pulling back and supply and ultimately having the pricing power to raise those ticket price. Consumers are alike that this coming. You're okay this is an interesting story the US birth rate. Is falling again because of economic concerns last year there are about 66. Babies born for every 1000 women between fifteen and 44 tell us a bit more about this study. Stick to take a look at -- -- new breakthrough -- about four million new babies being born. Sounds like a pretty big number but when you put meeting context that sent to the lowest we have seen since 19991. -- big reasons is is that folks just thinks it's too expensive to have a baby sit there actually holding back and adding to -- and -- are raising -- kids there. A big issue here because actually economic impact of this little birthright it's tremendous. If you take look at everything whether you're talking about toothpaste -- diaper purchases or this consumer staples -- -- Won't be happening as much anymore if there aren't as many kids also -- another -- one of the times. You buy a new house is when you're building your family and the fact that birth rates are falling not -- time for the housing market is because a lot of folks maybe. More apt to rent more apt to stay -- the housing market if there's not necessarily need to house an entire. Yeah out just another sign that folks still don't -- secure enough to expand. Sheila -- -- from Bloomberg let's take Wal-Mart look at the Dow before you go because it's down more than a 170 points expecting this to continue today. It looks like an ugly stick to the market today Stephanie as he said -- hundred -- -- one points NASDAQ down about 45 points. S&P 500. About one point 6%. Of course as these worries from around the world continue to weigh on investors minds we may very well be setting -- up for an ugly week for Thanksgiving. Sheila summarize and Bloomberg TV thanks -- have a good week. Thank you.

This transcript has been automatically generated and may not be 100% accurate.

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