A government shutdown has us feeling like we're going through an economic data depression.
Now the US Labor Department did not release initial jobless claims data this morning, and we won't get the September jobs report tomorrow either, assuming that the shutdown continues.
To find out about the job market for now, the Fed may have to rely on the September ADP report that showed the worst job losses in 2.5 years.
Now stocks ended Wednesday's trading session higher despite being Lower in the morning amid shutdown fears, but we saw a crypto and gold rally as investors look at these assets for safety.
Well joining me this morning to weigh in is Gabrielle Verrospe, CEO and founder of Latino Wall Street.
Good morning, Gaby.
Great to have you on the show.
So today is day 2 of the US government shutdown, and hundreds of thousands of workers are being furloughed amid the shutdown, and billions could be lost in GDP.
But for now, what is your take on the impact of the shutdown?
Yes, I mean, what a, what an amazing day actually because we would be thinking that the markets would be reacting in a negative way when you hear of a government shutdown that normally it doesn't happen.
It doesn't sound very optimistic, right for the economy if our leaders can agree on the budget, but what we're seeing right now, it's the strongest market in history.
It it's amazing to me how of course the news, you know, the market reacted to the news, but for a very short period of time that did not last and it ended up that very small dip ended up being bought like it always does because if we look back in history at every time the government shut down for the most part.
It tends to have a positive reaction, maybe not immediately but always eventually, and this is because the market knows this is a temporary thing.
This is not going to last.
It it never lasts, right?
The average time it lasts is about 8 days and the longest one we had recently was 35 days, which would of course be a long time.
But the markets know that any, any dip is going to be an opportunity to buy and that's why we're seeing any small dip getting bought and we are at record highs once again.
Yeah, and Gaby, as you mentioned, the S&P 500 hit record highs in the previous session, we are looking at the index extending gains in New York morning trade on this Thursday morning.
So I do want to get your take on what we're seeing in terms of economic data because we got that.
GDP report yesterday.
It looks as though we won't be getting the jobs report for the latest month tomorrow morning.
So when it comes to Fed expectations and this blind spot impact for the Fed in terms of data, how are you digesting all of this?
Yes, it definitely sounds a little scary that we're going to be left in the air basically without this data that we always have and we kind of like take for granted.
But very strange things have been happening to the data, not just massive revisions, but also, you know, the person in charge of the data getting fired.
It's been a big mess, so I think maybe this is what they need to reset and readjust so we can have more.
Accurate data, which is what we need, right?
We don't need data that they're going to tell us, oh, you know, we made all these jobs and then, oh, actually, you know, it's, it's a negative no like what we saw with ADP, um, that doesn't work.
What I see for the Fed is that if we look back when this has happened before, it's not the first time this has happened.
The Fed actually becomes more flexible with rate cuts with monetary policy when this happens because clearly something is off, something is wrong if the government is shut down so I think it's actually only going to help the markets because I do believe this rate cuts will happen twice before the end of this year, which is of course bullish.
And Gaby, finally, before I let you go, we have an IPO here at the New York Stock Exchange.
That's why you're hearing that trading bell in the background.
But speaking of which, yeah, so that really does speak to what we're seeing in terms of IPOs.
So finally, I do want to round out our Discussion by looking at two asset classes and that is gold and crypto.
So we're looking at gold continue to hit new record highs above 3900 and of course Bitcoin recovering that 119,000 level yet once again.
So what do you make of this price action?
Gold and crypto are now becoming the places where investors go when there's uncertainty and there's uncertainty right now, of course.
Not because the market is down, it's actually, you know, in in record highs, but because of the economic environment, because of the government shutdown, because of the economic data that is passed and that we're not going to have whenever there's any sort of uncertainty, conservative investors will tend to go to gold, and the ones that have more of a high tolerance risk will go to crypto.
So I think these two.
We are going to do very well and I think this is just getting started because we are about to see many more changes in the months and years to come with the economy.
Well, Gaby, we will have to leave it there.
But as always, great having you on the show.
Thank you so much for joining us this morning and thank you so much for all of your insights.
Thank you.
