Government Shutdown: Market Reaction, Watching Yields and U.S. Dollar

Government Shutdown Implications - The government shutdown began at 12:01 a.m. Eastern time, resulting from a stalemate in Congress over funding bills [1][2] - Essential services will continue, but non-essential functions, such as national parks, will close [3][4] - The market experienced a slight sell-off due to the shutdown news, but the overall impact on GDP is expected to be minimal if the shutdown lasts only a week [5][6] Market Reactions and Economic Indicators - The market is currently pricing in a short shutdown, with minimal movement in yields and the dollar [6][7] - Previous shutdowns, like the one from 2018 to 2019, had a more significant impact on economic data, which is a concern if the current shutdown extends [8][12] - The upcoming ADP employment numbers and inflation data will be closely monitored as they may be affected by the shutdown [9][10] Sector Performance and Investment Opportunities - Defensive sectors such as utilities, consumer staples, and healthcare are expected to outperform during this period [25] - Gold prices are rising amid uncertainty, indicating a trend where investors seek safe-haven assets [14][16] - Nike reported better-than-expected earnings, with revenue of $11.72 billion, surpassing the $11 billion estimate, and adjusted earnings per share of 49 cents, exceeding the 27 cents forecast [20][21]