PrimeRates Market Talk: Government Shutdown Means No Data, No Earnings, No Debt Deal

Written by: Jack Boylan

Idle minds, as they say. There is little that Wall Street likes less than a lack of data. Any data point will do, but something is needed to explain whatever the markets happen to do that day. With the so called government shutdown entering its second week, any official economic numbers have been put on hold:

“We have a vacuum as there is no economic data and the earnings season hasn’t started yet,” said Robert Royle, who helps oversee $21 billion as manager of the North American Trust at Smith & Williamson Investment Management LLP in London.

Thos is the kind of thing that makes analysts anxious, especially those scheduled to appear on CNBC. Fear not, as they will come up with something to say, most likely regarding the lack of data itself. That will tie in nicely to more bemoaning their lot regarding the government shutdown. Investors themselves however, have reacted to all this turmoil by looking bored. Markets were actually up on Friday and the week ended just a bit in the red. That won’t stop people from warning of the dangers ahead, but for now investors seem to be taking everything in stride. Heck, there are even analysts trying to look on the bright side of life:

Jim Reid, strategist at Deutsche Bank, said in a note that there is one silver lining in all of this mess. “If one is trying to look for some good news, it does seem that the longer this goes on, the less likely that the Fed are going to have enough ‘clean’ data to be confident enough to taper in December,” he said.

Oh, well that’s what is considered good news from a strategist anyway. For the rest of us, it may be a good idea to keep the investment weekend going. There are baseball playoffs and Monday Night Football to help keep that illusion alive, if only for a day. The screaming on the cable channels may begin to ratchet up again, although there did seemed to be more of a calm atmosphere once the markets decided to not cooperate in the panic. We’ll have to wait and see, of course, but with the debt ceiling deadline only 10 days away, I think the smart money will be on more screaming to come.

All in all, it should be a loud, if not interesting week. As always, it’s usually best not to get too caught up in the emotions of the moment. A balanced portfolio was able to handle the 2011 debt ceiling mess, despite much more panicky selling and it will get through this event as well. Have a good week!


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PrimeRates Market Talk: Government Shutdown Means...

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