Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets in the day ahead. Today is Monday, Sept. 25.
State of Play
Fresh concerns with the US consumer as credit card losses accelerate at the fastest pace since 2008. China property stocks dropped again overnight after embattled Evergrande said it would delay a debt restructuring meeting. As of 0640 none of that is really weighing on things in the US, or maybe not yet:
Stock futures are flat, with just small caps moving at all from the break-even point, down 0.4%;
Commodities aren’t doing much either. WTI crude oil is up 0.2% to trade north of $90/barrel again. Copper is down 0.6%;
Bonds are unchanged. The 2-year yields 5.12%, the 10-year 4.50%.
Known Events
There are no known events worth mentioning today. Instead there will likely be a lot of focus on this pending government shutdown. The deadline is Saturday, so still several days away. As can be expected, there is a lot of very dramatic language over this already, with Rep. Tim Burchett (R-Tenn.) saying “our financial ship is sinking.”
The Bottom Line
Where the government shutdown is concerned, it’s sufficient to rehash what The Contrarian told you the last time this had investors’ attention, this May:
There is still a week to go before June 1 and even then the US probably won’t be in technical default right away. So we can expect to hear more from this. Lawmakers have a vested interest in drawing these talks out to a dramatic conclusion because that attracts media attention and media attention is catnip to these folks. More than that, actually. It’s their lifeblood. That makes sense in a democratic society. Whoever commands the media can command the voters.
So rinse and repeat. Tomorrow we’ll have actual data to distract us. The highlight of the week is the PCE Deflator, the Fed’s preferred inflation gauge, on Friday. Then we can go back to obsessing about the Fed rather than these clowns in Congress.
Housekeeping
Obviously this is not investment advice (duh). Do your own research, make your own decisions.
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About That Government Shutdown