As the number of concerns begin to pile up, the government shutdown, yes, but then tariff concerns, consumer concerns, and the like, the sum total will begin to weigh on investor sentiment.

It is Monday, October twentieth twenty twenty five, day twenty of the government shutdown, now one of the longest that we've seen. So we're bringing you this special edition of Taking Stock to dig into what's really going on. And Marta, I know that you flew into Boston this morning. You were a little bit concerned that you might be late because of air traffic control issues. Well, what happened this morning?

Okay. So I was on time, but it is one more problem that we have to worry about these days. Air traffic controllers, of course, are federal employees. They're working without a paycheck these days, and it seems as though we're seeing more and more no shows as a result, and it's causing delays around the country.

Yeah. And I think that's what's really interesting to me is because despite all of these real impacts, the shutdown just isn't getting a lot of buzz right now. It seems to have slipped out of the headlines, and markets are looking right past it, Marta. Why is that, do you think?

So the market is ultimately concerned about what impacts those long term fundamentals of the economy. So for example, things that change earnings over longer stretches. Of course, there is a hit to consumer spending right now as federal employees aren't receiving those paychecks, but it's relatively modest compared to the size of the broader economy.

So, Marta, if this continues to drag on and if congress decides not to pay back these federal workers, could that start to change things, do you think?

Okay. That's still an if at this point, but I'm not convinced that the market will think that's a large enough hit to warrant a reassessment reassessment of the overall economy. Meanwhile, there's other news hitting the headlines, another China US tariff spot, broader signs of consumer credit problems. Those could be more impactful on the broader economy, and they're stealing the show.

Got it. So when does the government shutdown start to impact things?

Okay. So remember that in twenty eighteen, we had a months long shutdown, and the markets barely blinked. I'm not sure the shutdown matters a whole lot to markets on its own even if we do tack on a few more weeks. However, what we could find is that as the number of concerns begin to pile up, the government shutdown, yes, but then tariff concerns, consumer concerns, and the like, the sum total will begin to weigh on investor sentiment. Remember, these issues are hitting at really high valuations.

You always bring us back to those valuations. Do.

I do. I keep hitting on this idea of valuations because when they are at extremes, they tend to matter in terms of prospective three year returns, and they're at extremes today. I'm not frankly surprised by the volatility we've seen over the past few weeks even though we're at this point of seasonal strength where in the fourth quarter, you typically see markets move higher simply because of where valuations are across the economy. And, Marta, that's why your perspective is so powerful and so impactful because you really help us stay focused on the long game and take the emotion out of it.

So thank you so much. My pleasure. Thanks to all of you for watching. We're gonna be back on Friday with a look at the CPI report.

Yes. There will be a CPI report despite the shutdown. We're gonna take a look at what it could tell us about where the Fed may be headed at their next meeting and gonna put you on the spot before we go. Do you think we're gonna see a cut at the next meeting?

Cut or no cut? I'm guessing cut.

Alright. We're gonna hold you to it. Great. And we'll see you soon.