Federal employees are headed back to work today after our elected officials reached an agreement to fund the government for another three months. Yes, you read that right. We will be revisiting this issue again in January.
— Kai Ryssdal (@kairyssdal) October 17, 2013
As I previously wrote, this situation could have been very bad for the economy. As it sits today, it doesn’t appear that this government shutdown will be a significant event. Standard and Poors has a different view. They pushed out a researh note previous to the agreement being reached, stating that they were lowering their growth for the US from 3% to “something closer to 2%.” Whether or not have so many Americans out of work for the past 16 days really reduces US growth by 1/3 will be sorted out in the coming weeks (I’m thinking not!)
Politics will fade away this week as investors focus on quarterly earnings announcements. We have a ton of companies reporting right now, with some commenting on Washington. Bloomberg News reported yesterday that ‘several’ companies sited the government shutdown as impacting their financials. With markets at all time highs, it’s critical for us to focus on the fundamentals of our positions. Obviously there isn’t as much upside potential here as there was 2, 6, or 12 months ago, but as long as the Fed is behind this market, I believe it makes sense to remain in equities.
If you have comments on this post, send me a tweet. I’d love to hear your thoughts.