U.S. Government Shutting Down?

Market Update

Monday Blues

Investors are rightfully spooked after the past few weeks, and the numbers can back that up. How much you might ask? A teeny, tiny $19 billion. Stocks are down over 6% from July highs and the S&P 500 suffered its biggest week decline since March. To make matter worse, things might get a little more choppy. 🔪

Why the downtrend? It’s a mixture of sorts. High interest rates, student loans resuming, and attractive Treasury Bills all come into play. No one can afford to borrow money already and it’s only going to get tighter. Put all of these factors together and it makes sense why investors are staying out of the market right now. There’s simply safer, short-term investment vehicles to park your money. Not to worry, check out today’s quote of the day below to see the flip side of the coin.

Government Shutdown Looms

Government funding will expire September 30th, with the new fiscal year ringing in on October 1st. However, Congress has yet to agree on new policies for next year’s funding. Shocking. This would be the 22nd Government shutdown in the last 50 years….coming in at a 44% rate. I’m no expert at government fiscal policy, but that doesn’t sound very efficient.

If no agreement is settled by the 30th, non-essential government employees will be furloughed and non-essential government activities will be halted. National parks and museums will close, small business will suffer, and the consumer will lose confidence. A ripple through the economy. When a shutdown happens, it alarms investors. Not a recipe towards providing any stability to an already volatile market. We’ll keep an eye on the updates coming out of Washington this week.

Quick Hits

Thailand Tech Investment

Srettha Thavisin, the Prime Minister of Thailand announced that he expects a cool $5 billion in investments from Tesla, Google, and Microsoft. Why? Tesla is in the market for a new EV manufacturing facility, and Google and Microsoft are expanding data centers. Look for these companies to continue their expansion south of China.

GitHub & AI & The Future

GitHub and OpenAI have been working hand in hand to create an AI tool to help developers code called Copilot. GitHub CEO Thomas Dohmke is keen on the future of AI as it relates to business,

“The world has opened up around us, where company leaders and everyone across all titles are asking themselves: How can I use generative AI to make my company more productive, to change my business processes?”

The greatest companies always adapt in order to stay above the pack, and it seems as though incorporating AI will be the next major wave of business innovation.

Nike Earnings

Nike (NKE) has its earning call on Thursday. Earnings per share is expected to drop slightly while revenue will be up. Nike’s call will tell a lot about the current state of the consumer, the retail market, and consumer slowdown in China.

Quote of the Day

“History provides a crucial insight regarding market crises: they are inevitable, painful, and ultimately surmountable.” - Shelby M.C. Davis, Philanthropist, Investor, & Money Manager

Meme of the Day