Shut show
The US government may have ground to a halt, but global markets are still moving upward. It's a reminder investors now see the shutdowns as politics, not an economic threat.
As the sprawling bureaucracy beneath the world’s largest economy quite literally goes on hiatus, casual observers of financial markets could be forgiven for scratching their heads.
Two headlines published on Capital Brief in the past 24 hours capture the contradiction. “US Senate vote fails to end shutdown” read the headline on our Standup newsletter this morning. Ninety minutes later, a briefing item declared: "Australian shares to rise as Wall Street defies shutdown uncertainty".
The ASX 200 did indeed close higher on Thursday, rising 1.13%. That followed the US benchmark S&P 500 edging up to finish at another record high. Washington’s dysfunction and partisanship may trouble political scientists and historians, but investors are clearly unperturbed.
That wasn’t always the case. I was living in the US in 2013, during Barack Obama’s second term, when the libertarian Republican faction known as the Tea Party — remember them? — forced the first government shutdown in 17 years.
