Wall Street traders bracing for a wave of economic releases after the end of the US shutdown drove stocks lower and bond yields higher amid concern over whether the data will be enough to clear the path for a Federal Reserve rate cut.
With much of the optimism about the government reopening already priced in, the S&P 500 wiped out its November advance. A slide in big tech weighed heavily on trading. Short-dated Treasuries, which are more sensitive to imminent Fed moves, underperformed as money markets project about even odds of a central bank reduction in December.
President Donald Trump signed legislation to end the longest government shutdown in US history, marking the official conclusion to a 43-day impasse that will allow the government to begin to resume normal operations. However it could still take days, or even weeks, for the federal bureaucracy to fully restart and dig out of the backlog after being closed since Oct. 1.
The Bureau of Labor Statistics is expected to publish a calendar in the coming days with updated release dates for delayed economic data. The October jobs report will be released without a reading of the unemployment rate, Trump’s top economic adviser Kevin Hassett told Fox News.
“The gears of the government should be working again soon, and while that is a relief for markets and the economy, there is still plenty of uncertainty, particularly around the missed inflation and jobs data and how these fronts have been faring,” said Carol Schleif at BMO Private Wealth.
Schleif says she would not be surprised to see some market chop over the coming weeks as the government gears and economic data presses get turning again. While she still expects a rate cut in December, she notes the data blackout has made the Fed’s job difficult.
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