The Week Ahead: Markets Rise on Shutdown Progress Despite Economic Data Delays

TLDR

• US Senate made progress on ending the 39-day government shutdown with a procedural vote passing on a new funding bill released Sunday
• The shutdown has delayed key economic data releases including CPI, PPI inflation readings, and the monthly jobs report
• Consumer sentiment has dropped to near record lows due to the prolonged government closure and economic disruption
• Stock futures rose Monday morning with S&P 500 up nearly 1% and Nasdaq 100 climbing 1.5% on shutdown optimism
• The new bill would reopen the government through January 30 but still needs final Senate passage and House approval remains uncertain

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US stock futures climbed Monday morning after the Senate took steps toward ending the record-breaking government shutdown that has lasted 39 days. The S&P 500 futures rose nearly 1% while Nasdaq 100 contracts gained 1.5%.

E-Mini S&P 500 Dec 25 (ES=F)

The Senate held a key procedural vote Sunday night on a new funding bill. Enough Democrats joined Republicans to avoid a filibuster and advance the legislation. The Dow Jones Industrial Average futures added 0.4% in early trading.

The shutdown has disrupted federal services and delayed important economic data releases. The Consumer Price Index and Producer Price Index inflation readings have been postponed. The monthly jobs report has also been delayed due to the closure.

Source: Forex Factory

Consumer confidence has taken a hit from the prolonged shutdown. Sentiment has dropped to just above record lows as the closure affects the overall economy. The disruption has created uncertainty for businesses and households across the country.

The new bill released late Sunday would reopen the government through January 30. It includes various funding provisions for federal agencies and services. The legislation now awaits a final passage vote in the Senate.

House Vote Still Uncertain

The bill’s fate in the House of Representatives remains unclear. While it advanced in the Senate, House approval is not guaranteed. Democrats had earlier demanded an immediate vote on extending healthcare subsidies, which the current deal lacks.

Bond markets, banks, and government offices will be closed Tuesday for Veterans Day. Stock markets will remain open for regular trading. The four-day trading week for bonds comes as investors focus on corporate earnings reports.

This week features earnings from several major companies including Walt Disney on Thursday. CoreWeave, a data center firm focused on artificial intelligence, reports Monday. Sony and Cisco are also scheduled to release quarterly results.

Last week saw the worst tech sell-off since April. Nvidia and other technology stocks struggled amid concerns about AI valuations. The tech-heavy Nasdaq faced pressure from worries about an AI bubble.

The government shutdown has taken a toll on the economy beyond just data delays. Federal workers have been affected by the closure. Economic activity has slowed in areas dependent on government services.

Markets turned upbeat over the weekend as deal-making progressed in Washington. The procedural vote represented the first major step toward ending the shutdown. Investors showed optimism that normal government operations could resume soon.

The Senate vote advanced the legislation past a key hurdle. Final passage in that chamber appears likely given the procedural vote results. Attention now turns to whether House members will approve the measure.

Stock futures showed tech leading the gains Monday morning. The Nasdaq 100 futures outpaced other major indexes. The rally suggests investor confidence that the shutdown resolution is near.

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