On Wednesday, the U.S. government ground to a halt. Stock markets, however, jumped — one benchmark even hit a record high.
Traders in prediction markets are betting the shutdown will last nearly two weeks. Nothing too radical, since that’s the average length it takes for the government to reopen, based on data going back to 1990 from Bank of America .
The government stoppage isn’t putting the brakes on the stock market momentum. Are investors getting too adventurous? Well, history shows the pattern is not new. The S&P 500 has risen an average of 1% the week before and after a shutdown, according to data from BofA.
Even the ADP jobs report, which missed expectations by a wide margin, did little to subdue the animal spirits. Private payrolls declined by 32,000 in September, according to ADP, compared with a 45,000 increase estimated by a Dow Jones survey of economists.
The Bureau of Labor Statistics’ official nonfarm payrolls report is now stuck in bureaucratic purgatory and hence not being released Friday. So, the U.S. Federal Reserve might place additional weight on the ADP report — though it’s not always moved in sync with the BLS numbers. Traders expect weak data would prompt the Fed to cut interest rates in October.
Shrugging off all negative news, the S&P 500 closed above the 6,700 level for the first time. Looks like, once again, the perception of what is bad news is starkly different for outside observers and the markets.
Government shutdown in U.S. to last at least three days. The Senate rejected a stopgap funding bill again on Wednesday, and will not meet until Friday. Traders in prediction markets are betting the shutdown could last nearly two weeks.
Samsung and SK Hynix join OpenAI’s Stargate. The artificial intelligence company said Wednesday the partnership aims to increase the supply of advanced memory chips. Samsung and SK Hynix will ramp up their prediction of such chips, OpenAI added.
Intel is reportedly courting AMD. The chipmaker is in early discussions with AMD to manufacture its chips in Intel’s foundry business, according to Semafor. Shares of Intel jumped 7% on the news.
S&P 500 closes above 6,700. After rising 0.34% Wednesday, the broad-based index closed above the 6,700 level for the first time. The pan-European Stoxx 600 index added 1.15%. Euro zone inflation expectedly ticked up in September, according to flash data.
[PRO] Stocks that doubled in the third quarter. Among this group of star performers are several artificial intelligence stocks that have flown under the radar until now — but they could face downside ahead, according to LSEG consensus price targets.