Our views on the threat and effects of a possible/impending U.S. government shutdown, investor and market reaction, and gold approaching $4,000/oz.
“DOES the MOMENTUM of the US MARKET WITHSTAND a GOVERNMENT SHUTDOWN?” We were interviewed live on Asharq Business اقتصاد الشرق with Bloomberg morning segment with Mohamed Adel and Samia Saleh to discuss the threat and effects of a possible/impending U.S. government shutdown, investor and market reaction, and gold approaching $4,000/oz. Special thanks to Tabarek Jouini.
“U.S. markets are experiencing worrying anticipation as the government shutdown approaches, as questions about its impact on monetary data and policies mount. In this context, Michael Ashley Schulman CFA, head of investment at Running Point Capital, believes that the shutdown may add new layers of uncertainty to the markets, affecting interest bets and yield curve movement.”
Net-net, with radar dimmed, the path of least resistance is easier policy expectations and choppier multiples until the lights💡(and the data) come back on
NO DATA, NO DRAMA? Hardly, because the MARKET TRADES THE UNCERTAINTY, not the print!
Government funding deadline is Tuesday midnight; a partial shutdown is in play!
The second-order effects are economic releases (including Friday’s jobs report) that could be delayed if agencies go dark —> Markets are already gaming that scenario.
Going into the week, markets are TRADING THE FOG as much as the fundamentals. The biggest swing factors are a possible government shutdown that could delay key data like a labor-data trio that normally anchors expectations, manufacturing PMIs that gauge momentum, tariff noise that hits supply chains, and energy headlines into OPEC+ that sway inflation psychology.
If agencies go dark, desks pivot to SHADOW STATISTICS—ADP and high-frequency job trackers like Homebase or Indeed, private PMIs from S&P Global, and alternative inflation gauges—to keep the macro narrative moving even when official prints don’t; pricing fatter event-risk around private releases, and assuming THE FED WILL USE FORECASTS instead of fresh data.
SHADOW DATA replaces the government prints when BLS, BEA, and Census go dark.
In that vacuum, investors tend to price uncertainty:
🔵In rates, that may favor owning event risk, adding duration, and leaning into curve steepeners on the view the Fed stays dovish-by-default without fresh evidence
🔵In equities, it argues for lighter beta and more idiosyncratic pair trades, especially where tariffs and oil🛢️are the story, managers may dial down broad risk and lean into stock-specific stories
🔵Credit is more comfortable in investment grade carry stays cautious on high yield
Net-net, with radar dimmed, the path of least resistance is easier policy expectations and choppier multiples until the lights💡(and the data) come back on🔛
The dollar often softens into shutdown risk, and with the SEC and CFTC partly hamstrung, IPOs and some oversight slow at the margin while the real drivers become Friday’s missing data and any OPEC+ chatter.
Asia’s Monday open already reflected a slightly softer dollar on shutdown risk. With radar dimmed, investors hedge!🦔
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Disclosure: The opinions expressed are those of Running Point Capital Advisors, LLC (Running Point) and are subject to change without notice. The opinions referenced are as of the date of publication, may be modified due to changes in the market or economic conditions, and may not necessarily come to pass. Forward-looking statements cannot be guaranteed. Running Point is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about Running Point’s investment advisory services and fees can be found in its Form ADV Part 2, which is available upon request. RP-25-237
