Jamie Dimon has joined David Solomon, Ray Dalio, Jeremy Grantham, Michael Wilson, and the Bank of England in warning of a significant correction in the months ahead. Makes you wonder what we’ll hear from Jay Powell later today…
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In the absence of economic data, even as suspect as it’s been these past few months, today’s release of FOMC minutes takes on added importance.
Meanwhile, the Bank of England joined the chorus of those who have proclaimed the equity markets overpriced.
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Futures are up marginally ahead of tomorrow’s FOMC minutes.
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There’s no jobs data today – legitimate or otherwise. So, investors and Fed watchers are left to reflct on the trend that was already arguing against the US economy being the “envy of the world.”
Futures are flat ahead of the open.
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While the parties retreat to their corners and refine their talking points, markets got off to a very strong start in Q4. At some point, someone will pay a political price for shutting down the government. But, both parties are betting they’ll prevail. And, for now, the algos are making hay.
Indices are happy to focus on AI and semis. And, past shutdowns have been non-events from an investment standpoint. Our analysis of shutdowns over the past 25 years:
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The federal government shut down last night, furloughing hundreds of thousands of employees and shuttering hundreds of programs and services.
Futures were off sharply overnight but have since recovered much of their losses.
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Among the biggest threats a shutdown poses to markets is that economic data would dry up. So, the algos are having a very tough time deciding how the brinkmanship playing out in Washington will affect both the real economy as well as how the economy is perceived.
One thing for sure, the potential shutdown has eclipsed both tariffs and Jeffrey Epstein in the news, Maybe that’s the point.
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The two sides seem bound and determined to stick to their guns this time, their positions entrenched and unyielding. This afternoon’s White House meeting to avert a shutdown seems mere window dressing.
Naturally, futures are higher.
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Futures are up slightly ahead of the PCE report – the Fed’s preferred measure of inflation.
As we like to remind everyone, important government-generated economic data all come with an asterisk ever since Trump abruptly fired the head of the BLS after an employment report he didn’t like. The chilling effect will no doubt affect many government employees responsible for generating economic data.
I have no idea re the politics or backbone quotient of BEA director Vipin Arora. But, he reports to Trump sycophant Howard Lutnick, so take these and all future data with a huge grain of salt.
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