What a government shutdown means for markets, plus ADP reports US private payrolls drop by 32,000

Group 1: Government Shutdown Overview - The US government has shut down for the first time in 7 years due to a failure to reach a spending agreement between Republicans and Democrats [1][6] - Democrats are demanding healthcare provisions, including the extension of Affordable Care Act subsidies and a reversal of Medicaid cuts [2] - The shutdown could lead to an economic data blackout, affecting key reports like weekly jobless claims and the September payrolls report [4][33] Group 2: Market Impact - Stock futures and the dollar are declining as traders assess the risks associated with the shutdown, while gold prices are surging, nearing $3,900 an ounce [3][26] - The ADP report indicated an unexpected decline of 32,000 jobs last month, raising expectations for a Federal Reserve rate cut [4][29] - Historically, government shutdowns have not resulted in major sell-offs in the stock market, but this shutdown may be different due to potential job furloughs turning into cuts [5][32] Group 3: Economic Effects - The Congressional Budget Office estimates that about 750,000 federal employees will be furloughed, costing $400 million per day in lost compensation [34] - Essential services will continue during the shutdown, including military and law enforcement, but some services may experience slowdowns [35][36] - The impact on federal benefits like Medicare and Social Security will be minimal, but SNAP benefits could be affected if the shutdown lasts more than 30 days [36][37] Group 4: Company-Specific Updates - Nike reported first-quarter earnings that exceeded estimates, but warned that progress may not be linear due to tariffs expected to cost $1.5 billion [38][39] - Berkshire Hathaway is in talks to acquire Occidental Petroleum's chemical business for around $10 billion, marking its largest deal since 2022 [39] - The US government plans to take a 5% equity stake in Lithium Americas to bolster domestic supply chains for critical minerals [41]