Most shutdowns last only a few days, although the last one in Trump's first term was a record 35 days. A few days of patchy economic activity and data releases will have minimal market impact, but a month would be a different story, right? Perhaps. But it's worth noting that during that record 35-day shutdown, Wall Street's main three indices rose between 11% and 13%.
* Like a broken record
The S&P 500, MSCI All Country equity index, gold and silver all traded at new peaks on Wednesday, and the Dow notched yet another closing record high. Despite mounting evidence of stretched positioning, valuations, and sentiment, nothing seems to be standing in the way of this juggernaut.
The common thread is the prospect of more Fed rate cuts. Traders continue to lean that way, with another 50 bps of cuts this year almost fully in the cards. But it's hard to see more easing being priced absent a sudden deterioration in economic conditions. And that would surely prompt investors to reassess.
* U.S. Supreme Court and the Fed
Federal Reserve Governor Lisa Cook will remain in situ at least for the rest of this year, after the U.S. Supreme Court on Wednesday said it will listen to arguments for her dismissal in January. That means she will be able to vote at the Fed's October and December policy meetings.
President Trump is trying to remove Cook over alleged mortgage fraud - the first-ever bid by a president to fire a Fed official - part of a multi-pronged challenge to the Fed's independence. Trump nominee Stephen Miran recently got onto the Fed board, but it's not all going the president's own way.
