Investors around the world recommend the effects of the latest government’s closure in the United States, after the congress failed to reach an agreement to finance government operations. The dollar fell 0.2% against the Japanese yen, and US stock futures decreased at the expiry of the deadline for financing at midnight, which led to the first closure of the government in the country in nearly seven years. The White House budget office has asked federal agencies to implement plans to suspend all non -basic tasks, disrupt the work of hundreds of thousands of Americans and confuse many public services. Also read: The US government closes its doors after negotiations between Trump and Democrats failed, the market reactions, which remained limited, were in line with what was shown by previous closing experiences that quickly ended with political settlements to avoid the economy long -term damage. Wall Street used to ignore such closures. The fear of the length of the closure, but the dispute between the leaders of Congress looks more intense this time, increasing the possibility of a long confrontation that could harm the largest US economy in the world. This concern is exacerbated by the release of the administration of President Donald Trump by carrying out collective separation of federal employees instead of placing them with unpaid leave, which can increase the demands of unemployment subsidy at a time when the labor market is a base. The broader economic consequences focus on the labor market and the expectations of interest rates, as government data will stop, which means that the absence of basic reports this week, such as unemployment requirements, factory requests and employment reports for the month of September, which is the most important indicators that “Wall Street” depends on expectations and interest rates. “This closure can have greater consequences than usual, because the risk ceiling has risen a lot before it occurs,” said Steve Susnik, the main market strategy in ‘Injur Brokers’. The situation is more complicated, as the long wave of Ascension in the stock market has led the assessments to the levels similar to those that preceded excessive optimism in the past. As the fluctuations remain low, and the willingness of the traders to utilize possible profits at the end of the year, any price reduction can launch a wave of forced sale of the decline. Also read: The stock markets decrease with an US closure that can disrupt the job report. What are the investors looking at? If the political stalwart is long, analysts are likely that gold will continue its strong performance as a safe haven, even after the approach to a record level that affects about $ 4,000. Part of this increase is due to the fall in the dollar, which is often pressure during previous government closing periods. According to Ing, more weak in the US currency can increase the gains of the Japanese yen, and perhaps also the euro. Long -term US Treasury effects also benefited from previous closures, against the background of betting on a possible economic weakness. “Interest payments and debt service are not threatened. Thanks to the high returns, US treasury effects remain attractive, and we recommend cautious investors from the effects of the government closure by increasing their exposure to it.” As for those who prefer to stay active in the stock market, which they must now follow: Defense continues with defense companies, such as “RTX” (RTX) and “Al -3 Harris Technologies” and “Aerovironment” (aerovironment), strong profits, supported by increased federal spending on ammunition and aircraft defense projects, which strength strengthened. Government’s closure can reduce the enthusiasm against these shares, all of which are closed at record levels on Monday, as well as similar companies such as “Boeing” and “Lockheed Martin”. “We don’t expect a big impact on defense companies, but morale could fall,” TD Quinn’s analyst Gotam Khanna told clients last week. Seaport Global Securities this week increased its classification of ‘general dynamics’ from neutral to sale, taking into account that any price reduction due to closing will be an opportunity for investors to enroll. Government services and airlines may not reach companies such as “Evil Allen Hamilton” and “Leidos Holdings” and “Caci International”, which provide consultation and technology services to the government in light of the closure. According to Tobi Sumer of “truest”, the income of these businesses in previous closing periods has dropped, although the impact was usually limited, but any long closure can reflect negatively on the profits. As far as the airlines are concerned, which depends on the government funded by the government to ensure up to 2% of their annual income, it can be more affected. The long break from this financial flow will mainly harm a sector, and the worst is that thousands of federal employees who will spend their regular salaries can reduce their spending on entertainment trips, according to Shila Kahiaoglu of “Jeffrez”. In the past, the shares of both groups of companies fell before closing and then recovered as they continued, according to Kahiaoglu. The “Standard & Poor’s 1500” index for airlines dropped by 1.9% on Tuesday and recorded its worst month since March, while “Caci” and other service companies faced fluctuations due to the fear of a greater orientation to reduce government spending. Periodic shares in this case depend on the closing effect of the reflection in the performance of the economy. If it is long enough to delay growth and increase unemployment rates, morale sectors such as industry and financial services may weaken, according to Matt Gertkin, the main expert of geopolitical strategies at BCA research, as these sectors include enterprises whose profits are closely related to the performance of the US economy. Also read: What happens when the US government is closed? “If the closure continues for a long time, it can draw attention to the amount of risks.” The shares of giant industrial companies such as “Caterpillar” and “Deare & Co” have increased since the lowest levels in April, but the sector still has the pressure of customs duties and the slowdown in industrial activities. As for the shares of financial enterprises, from banks such as “JB Morgan Chase” to asset managers such as “Apollo Global Management”, they saw fluctuations against the background of the strength of the economy earlier this year. Consumer health -related companies, such as ‘confirmation tax’ specializing in rapid financing, are more vulnerable to sharp fluctuations. Bloomberg Economics estimates that about 640,000 federal employees will be referred to forced leave during the closure, which can increase the unemployment rate to 4.7%. This rate can remain high, even after the closure has ended as Trump goes out his threat to separate some employees. Changekin pointed out that investors who fear periodic shares can go to defensive sectors in the market, such as healthcare and public facilities. They have prepared for fluctuations, the broader market often ignores the disputes associated with the budget. The Standard & Poor’s 500 index shook almost on average during the last 20 closing cases, according to data collected by ‘Trost’. In turn, the veterans in Wall Street still adhere to their investment centers at this stage. However, fluctuations can rise in the short term, especially if the delay of the data is hampered by interest rates, according to Jennifer carpenter of the “Wales Vargo Institute for Investment”. The “Labor Statistics Office” is likely to postpone the work report scheduled for Friday, while continuing the differences on the budget the issuance of inflation data scheduled for October 15 may threaten “RBC”, the reports of the private authorities, such as the ‘supply management institute’, which will issue the manufacturing and services later this week. The Standard & Poor’s 500 index ignored fear on Tuesday and rose by 0.4%. But in the long run, any damage to the economy can limit the momentum of a wave of Ascension to signs of slowdown. “The market has problems with finding momentum at these levels … It’s hard to view this positive for the market,” says Mark Malik, CEO of investment at “Siebert Financial”.
The closure of the US government … investment opportunities amid federal paralysis
