Mixed Bag on US Stocks Ahead of Potential Second Government Shutdown


Stocks are rallying today after quite an impressive 2019 comeback, although the DJIA has cratered a bit from Feb. 7.

At Christmas time, things looked pretty bad for the S&P 500 and the Dow Jones Industrial Average. Since then, both of these have risen more than 5% and the green continues today.

Analysts are citing optimism on U.S./China trade relations. However, others point out that the next round of talks, starting now, is set against a backdrop with a timeline.

“The latest round of trade talks set to begin Monday between the U.S. and China, with lower level discussions to start off the week, and Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer arriving Thursday and Friday for discussions,” wrote Chris Matthews and Barbara Kollmeyer this morning at Marketwatch. “Even if tariffs on Chinese goods remain at 10% beyond a looming deadline, as some have reported, the lingering uncertainty around a trade resolution would only highlight that a 12-month long negotiation between the world’s largest economies has failed to result in any deal.”

Also a big deal for analysts: another government shutdown looms – and that could have a negative impact on markets.

Key lawmakers plan to meet Monday afternoon in a late-stage bid to avert a government shutdown, trying to revive talks that derailed over the weekend amid a dispute on immigration enforcement rules.

“Lawmakers had hoped to reach an agreement by midday Monday, a timeline they thought was sufficient to win House and Senate approval this week,” wrote Washington Post reporters Erica Werner and Damian Paletta this morning. “But talks broke down over the weekend, leading to acrimonious finger-pointing and angry outbursts from President Trump … To avert a partial shutdown set to begin Saturday, the House and Senate must pass identical spending bills that Trump would then need to sign into law.”

To be sure, there is significant heartburn over just the thought of an impending shutdown – the last one left some 800,000 federal workers without paychecks for at least two pay periods, and may ultimately stymy great US growth, according to NYT reports.

Keep an eye out as legislator scurry around the drawing board, and the starter pistol of Monday morning kicks off a big week.