Updated:2024-12-22 02:30 Views:110
Stock investors took their cue from data showing that inflation continued to slow in Novembervvjl, shrugging off the looming threat of a government shutdown.
The S&P 500 rose 1.1 percent on Friday, its biggest gain in over a month. The rally came after the Personal Consumption Expenditures index, which is the Federal Reserve’s preferred measure of inflation, showed a slower than expected gain in prices — on a monthly basis — than economists had expected.
Prices rose 0.1 percent in November from October, compared with the 0.2 percent that had been predicted. That detail helped assuage fears that had dragged stocks lower earlier in the week. On Wednesday, after the Federal Reserve reined in its forecast for interest rate cuts next year, in part because of concerns that price increases could speed up again, the S&P 500 suffered its sharpest decline in months.
hideous slotsFriday’s move left the appearance of calm on Wall Street, even as politicians in Washington scrambled to keep the government from partially shutting down. Investors have become used to such scrambles over government funding plans, helping inure them to the potential for economic havoc that could result.
And while a government shutdown threatens the livelihoods of federal workers and can cause transportation delays and other disruption, it is not expected to have a severe, long-term impact on the trajectory of the economy.
Overall, violent crime fell 3 percent and property crime fell 2.6 percent in 2023, with burglaries down 7.6 percent and larceny down 4.4 percent. Car thefts, though, continue to be an exception, rising more than 12 percent from the year before.
But the move backfired in a way that few supporters expected. Californians in 2021 actually tossed nearly 50 percent more plastic bags, by weight, than when the law first passed in 2014, according to data from CalRecycle, California’s recycling agency.
“Even if a shutdown occurs, we believe there is likely to be little economic or financial-market impact,” said Paul Christopher, head of global market strategy at Wells Fargo Investment Institute. He advised investors to not react, saying that he and his team “prefer to look through any shutdown.”
Even the Russell 2000 stock index, which tracks smaller companies more exposed to the ebb and flow of the economy, rose on Friday, up roughly 1 percent.
Of course, stock investors might not be able to shrug off the shutdown — should one begin — for long. Paul Donovan, chief economist at UBS Global Wealth Management, noted that the, “longer a shutdown lasts, the more disruptive it is to the U.S. economy.”
That could be especially true if economic data is delayed next year due to a protracted shutdown, making the Federal Reserve’s job of steering the economy more difficult.
Nonetheless, “a short-lived shutdown affects government workersvvjl, but has limited economic impact,” he said.