October 2
Putting the shutdown in perspective: A C.B.O. analysis of the record-setting 34-day shutdown in 2018 and 2019 found it led to an economic hit of just $3 billion.
Economists say such losses are recouped in subsequent quarters. But that partly depends on how many furloughed workers ultimately keep their jobs. See DealBook.
The Committee for a Responsible Federal Budget is right.
Shutdowns don’t save money, they waste money. Under shutdowns, we pay federal workers not to work and rent buildings that aren’t being used, all while requiring costly shutdown planning, inefficient allocation of government resources, and a reduction in the services available to the American people. We should avoid a shutdown and keep the government funded.
Beyond that, we need a plan to actually reduce our massive deficits – and that should include extending discretionary spending caps. The last thing we should be doing is coupling a CR or appropriations bills with new debt-financed spending or tax cuts.
Here are the things our political leaders have failed to do this year: present a full President’s budget, adopt a Congressional budget resolution, and enact a single appropriations bill. Let’s not add keeping the government open for the new fiscal year to that list.
https://www.crfb.org/press-releases/lawmakers-should-avoid-wasteful-government-shutdown
This is nonsense. I let stuff like this go in one ear and out the other.
President Donald Trump told top military brass that the US is fighting an “invasion from within,” as he used a highly unusual gathering of officers stationed around the world to deliver a largely political speech that highlighted border security and rooting out “woke” culture.
“After spending trillions of dollars defending the borders of foreign countries, with your help, we’re defending the borders of our country,” Trump said on Tuesday at Marine Corps Base Quantico in Virginia.
“It’s the enemy from within, and we have to handle it before it gets out of control,” he added. See Bloomberg.
This is sad.
London has slipped out of the world’s top 20 initial public offering markets as the third quarter ends, overtaken by Mexico and Singapore in a fresh blow to its standing as a global finance hub.
The UK exchange has slipped three places to 23rd in a Bloomberg ranking of the world’s busiest IPO destinations, placing it behind the frontier market of Oman. Volume this year dropped 69% to $248 million, the weakest haul in more than 35 years.
This year’s largest London IPO — an April offering from accountancy MHA Plc — raised £98 million ($132 million). No deals have involved a major Wall Street bank; they were instead arranged by small local outfits like Cavendish Plc and Singer Capital Markets. The third-quarter picture is even starker with just $42 million of deal volume, down 85% from the same period last year, according to data compiled by Bloomberg. From Bloomberg and Marginal Revolution.
British elites have destroyed what was once the crown jewel of the U.K. economy.
Markets and Stocks
I am fearful of a lengthy shutdown. Neither political party appears ready to compromise.
The ADP report on private sector employment came in light. It registered a decline in private sector employment of 32,000.
With Trump’s migration policies we are flying blind on the true state of the employment market.
The overall economy is okay because the AI boom.
The Fed will reduce interest rates by 0.25 percent on October 29.
Everyone loses in a shutdown. But shutdowns typically have little effect on equities.
I look for markets to grind higher by year end. At the moment, U.S. equities are churning.
For big big winners, think about taking a little off the top.
Trading platform Robinhood is the top performing S&P stock so far this year, up 284%.
Centrus is up over 100% since I began to write about it earlier this year.
centrus_energy (@Centrus Energy) posted: Foreign state-owned enterprises control 100% of uranium enrichment. Now they want to expand with OUR tax dollars. Centrus is the made-in-America solution to our nuclear fuel needs. Up, running & ready to do more. https://x.com/centrus_energy/status/1955359383128359227?s=66
I continue to like both names, but please think about top slicing.
Applovin an Abacus Research recommendation led the S&P 500, in Q3 , doubling in value over the past three months.
After Nvidia, Alphabet is my top pick among the hyper scalers. Meta is number 3. I believe Gemini is the best AI model.
Alphabet shares closed out their biggest quarterly gain in 20 years, the latest reflection of how investors are turning more positive on the Google parent as it strengthens its foothold in artificial intelligence.
The stock gained 38% this quarter, its biggest such gain since mid-2005. The move brings Alphabet’s year-to-date gain to nearly 30%, compared with a 17% rise in the Nasdaq 100 Index. See Bloomberg.
Nvidia is at an all time high. Stay with Nvidia and the hyper scalers, but not Tesla. I also like Oracle and Broadcom.
GLW remains a top pick. Fiber will replace copper inside the data centers that power AI.
Santoli
The market continues to tread water, the indexes churning below record highs while a majority of stocks slip and evidence of economic-growth concerns surface in spots.
Nvidia held the S&P 500 near the flat line almost on its own, up another 2.6% after Meta’s $15 billion deal with CoreWeavefor AI infrastructure services was enough to recharge the enthusiasm for the sustained demand for processing capacity.
This came along with a generally as-expected JOLTS report that nonetheless saw job openings slip below the total number of unemployed workers for the first time in years.
The consensus still seems to believe a few things that they think will keep markets biased to the upside for a bit: An incipient reacceleration of growth as rate cuts and tax-cut provisions take hold; a durable corporate-capital spending binge; a balanced labor market holding consumption steady if not strong; a year-end rally chase as not-fully-invested professional investors try to keep up. It’s all plausible, though worth noting over history the fourth quarter is up “only” 75-80% of all years, not a sure lock.
Energy
The power needs of massive AI data complexes are rapidly driving up electricity bills — piling onto the rising prices for food, housing and other essentials already straining consumers. That’s starting to have economic and political reverberations across the country as utilities and local officials wrestle over how to divvy up the costs of data centers.
According to a Bloomberg News analysis, wholesale electricity now costs as much as 267% more for a single month than it did five years ago in areas located near significant data center activity.