The government shutdown is now entering its fourth week, cutting off a large source of useful information for investors. How are investors supposed to keep track of what is going on financially and economically without government statistics? It’s our job to work around difficult situations. Here is what we, and investors, can count on during an information drought.
A ray of light in the darkness
The Commerce Department, the most prolific supplier of useful information is closed. Things like home sales and trade data are lost to us. Retail sales and GDP numbers could go silent as early as February.
On the other hand, the Labor Department is open since it has already been funded through 2019. The all-important jobs report will come out on the first Friday of every month. Although the jobs report may be a little distorted by a shutdown, it’s still the biggest and best indicator of economic growth in the US. Any investor can get the jobs report easily, and there is ample media coverage and commentary following its release.
The Federal Reserve
The Federal Reserve is privately funded by member banks, so it’s not affected by the shutdown. The Beige Book comes out eight times a year. Yesterday’s report showed “modest to moderate growth” nationwide with “tight labor markets”. The Beige Book, jobs report and quarterly GDP are broad and essential pieces of information. We can count on at least two of the three to be released regardless of whether the shutdown continues.
Bloomberg is a private subscription service with an enormous amount of market data and data analysis. Sometimes the information is available by simply going to bloomberg.com. Bloomberg does want its free subscribers to become paid subscribers so they give away a lot for free. Max’s years at Bloomberg give us a real edge in assembling information for insight. He and I are into less easily obtainable indicators like fixed income and commodity spreads. If you would like some of those please give us a call. As an investment services firm, we’re designed to provide information like this for clients.
Wall Street can be your friend during the shutdown. Many firms have robust research departments, staff economists and analysts tracking companies, markets and economies. They give away a lot of opinion backed by data. As a services firm we get a lot of propriety material from Wall Street. You might find Wall Street information useful if you have a single security, or an industry that you know well. Please ask us questions on these topics.
We are assuming the government shutdown will last into the second quarter. I know that sounds drastic, especially to those who are expecting paychecks, traveling, farming or seeking clearance for an IPO or a merger. While we are hopeful the shutdown will end soon, there is no statutory end in sight so we are prepared to act as if it’s going to last for months. If you have any questions on financial data and how it might affect your portfolio please give us a call.
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