Jason's World

Stock markets have been battered throughout the past week as treasury yields rose to their highest in more than 15 years. While there was a brief reprieve Friday morning, markets sank as Treasury yields gained back all their losses in the afternoon, and as investors stared down the resumption of student loan payments and a seemingly inevitable shutdown.

While most analysts do not consider a brief shutdown to carry significant risks to the economy, they could not say the same if it dragged out-as many predicted would happen. Goldman Sachs predicted a 90% chance of a shutdown that will last at least 2 weeks-which, combined with many other pressures on the economy, might pose a serious risk.

After hardline Republicans rejected bill after bill after bill that Speaker McCarthy put forward to avoid a shutdown, he eventually gave up appealing to the hardliners in his caucus and passed a CR in which the only concession to the hardliners was the absence of aid to Ukraine. Though Mr. McCarthy has put his job in serious jeopardy, the fact that this CR went through so quickly just a few hours before a government shutdown represented nothing short of a miracle given the certainty with which analysts predicted a shutdown. 

Though the CR merely kicks the can down the road for 45 days, investors can breathe a sigh of relief that the economic risks associated with a shutdown will be avoided for now. The fears surrounding a government shutdown have contributed to September being the worst monthly performance for stock markets this year. The Nasdaq Composite dropped 5.8%, the S&P 500 dropped 4.9%, and the Dow dropped 3.5% in September.

Critical reports on purchasing, construction spending and job growth are due in the coming week. With investor expectations for rates skyrocketing in the past two weeks, weaker data will provide some relief for investors anxious about rising rates. 

Amazon fell 4% on Tuesday after the FTC and 17 different states sued it for anticompetitive practices in the online retail industry and accused it of holding a monopoly over the industry. This is part of President Biden’s efforts to boost antitrust enforcement. Earlier in his term, Mr. Biden’s FTC has also brought lawsuits against Facebook and Microsoft. The DOJ under Mr. Biden has also brought a suit against Google, the biggest antitrust case in decades in the United States.