00:00 Josh
Well, this week the US government went into a shutdown and Wall Street seemingly shrugging it off. Yahoo Finance’s Allie Canal taking a closer look with the Investor Playbook. Allie.
00:09 Allie
Hi, Josh. Yeah, investors don’t seem all that concerned with the major indexes continuing to notch record highs. Wall Street is leaning on momentum, AI optimism and continued expectations for further Federal Reserve easing. Now, the rally has been led by large cap tech, and it comes even as Washington gridlock delays critical economic data, including the September jobs report. Now, without those figures, both investors and the Fed are essentially flying blind here, turning instead to private sector readings like ADP and JOLTS, which do point to a sharper slowdown in the labor market. And as questions mount about what to do next, some strategists told us that the best move may be no move at all. Here’s more of what they had to say.
01:03 George C.
Investors should just ignore that and pick great companies or or great ETFs or index funds and just leave it alone and do as little as possible. I think the it it’s it’s counterintuitive that I think investors the less they do the better. Just get your allocation right, get it on get it in place and just forget about it and go live your life.
01:25 Steve Sosnick
I called it the Spider-Man market in regards to the Wall of worry, uh which is clambering up there. I you know, there’s a certain amount of nihilism actually, almost that just all news is good news and no news matters. And so, uh you can argue that by not getting this piece of news, that’s one less impediment in the market uh in the market’s relentless rise.
01:52 Kathy Jones
the longer the shutdown goes on, the less economic activity there is, the the greater the risk is that we have a downturn in the economy, at least a much softer economy in the fourth quarter and that could lead the Fed to cut twice rather than the one time that we expect.
02:11 Allie
So you’re hearing right there from Kathy Jones, head of fixed income at Charles Schwab, that for the Fed, the shutdown can be a real pain point, especially as it juggles both sides of its dual mandate, and that pressure only grows the longer that this drags on. But as George C. and Steve Sosnick pointed out, investors aren’t necessarily facing that same kind of stress. The message from them is simple, stay disciplined, stay invested and don’t overreact to the headlines. Now, that doesn’t mean stocks can’t reverse course or that volatility won’t pick up. In fact, George told me that markets don’t go up forever, but at least in the context of the shutdown, investors can afford to sit tight here, Josh. So that’s the general messaging that we’ve been getting.
02:51 Josh
All right, thank you, Allie. Appreciate it.