Govt. shutdown staying in place places more downside risk to economy, says Raymond James' Larry Adam

Market Outlook & Potential Risks - The market is vulnerable to pullbacks, which could present buying opportunities [1] - A government shutdown poses a downside risk to the economy, potentially weakening growth from an expected near-zero to 0.5% this quarter [3][4] - Market pullbacks are expected to be normal, in the range of 5% to 10% [6] - Technical indicators show the market is 12% above the 200-day moving average [7] - Softness in the economy could negatively impact earnings, especially for goods-producing companies, leading to weaker holiday spending; a survey indicates 88% of respondents plan to spend the same or less [8] Sector Rotation & Earnings - Mega-cap tech stocks have seen the biggest upside since April lows and have higher beta, making them more vulnerable to market downturns [11] - Mega-cap tech companies' earnings are expected to grow 19% in the fourth quarter, tripling the 3% growth expected for the rest of the market [13] - A sustainable increase in earnings for the rest of the market is needed to support a broader sector rotation [13] Tariffs & Policy - The Supreme Court's decision on tariffs is not expected to significantly impact the outlook, as the president is likely to implement tariffs regardless [2][3]