U.S. stock futures edged lower Tuesday night as Wall Street braced for a likely government shutdown at midnight, with Dow futures slipping 68 points and S&P 500 and Nasdaq 100 futures both down more than 0.2%. Congress will suspend around federal workers and delay critical economic data like Friday’s jobs report, which has added to investor worries about inflation, slowing hiring, and higher stock valuations. Markets ended September on a high note, with the S&P 500 gaining 7.8% in the third quarter, and history shows stocks often climb during shutdowns. After hours, Nike jumped 4% on stronger-than-expected sales, while Lithium Americas surged 34% after the U.S. government announced a 5% stake in the Canadian miner and its Thacker Pass lithium project. The stock market typically gains during a government shutdown, so it wouldnt be a bad idea to look into stocks
You make some valid points. I read an article about the US shutdown as well. My article talked about how there is an estimate that the shutdown and loss of income for federal workers could decrease the nation's annual growth rate from 0.1% to 0.2% in the fourth quarter. My article also talked about the slowdown in hiring, like yours did.
ReplyDeleteInterestingly, you mention that stocks tend to perform better during government shutdowns. I wonder why this is and what the correlation between the two is. Also, with the government being shut down and important data not coming out, where do you think the Fed will turn to look for this data? It will be interesting to see how the government shutdown pans out and what the stock market will do in the upcoming weeks.
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