A quiet news cycle overnight has left markets little changed on the day. Major equity indices are little changed in either direction (S&P 500 futures up 6 points), and Treasury prices are slightly lower across the curve. With the government shutdown now in day 26, there has been more discussion of the impact on GDP. Markets haven’t been as reactionary to this point (more focused on Fed policy, trade, Brexit, etc.), but that can certainly change as the shutdown persists. The GDP impact feeds into consumption and corporate earnings, which ultimately impact markets.  In a related story, the December retail sales report scheduled for release this morning has been postponed due to the shutdown. China’s central bank injected a record $83 billion into the financial system to reduce liquidity risks in its banks and provide general stimulus, and despite yesterday’s crushing defeat before parliament, U.K. Prime Minister Theresa May is expected to survive today’s confidence vote. The general market expectation is that the March 29 target date for the U.K. exit from the European Union will be postponed until summer (or later).

Jason Haley
Managing Director, Investment Management Group