S&P 500; US Indexes Fundamental Daily Forecast – Key Vote on Ending Shutdown at 1700 GMT

The major U.S. stock indexes are called lower based on the pre-market trade, as investors continued to assess the effect of the government shutdown on the economy and the markets. As it stands, a short-term shutdown will probably have little effect on the economy, however, it the shutdown moves into a second week, it could start to negatively impact first quarter GDP.

Shortly before the cash market opening, March E-mini S&P 500 Index futures are trading 2809.75, down 1.25 or -0.04%. March E-mini Dow Jones Industrial futures are trading 25997, down 49 or -0.19% and March E-mini NASDAQ-100 Index futures are at 6843.50, down 2.25 or -0.03%.

Most stock traders are focused on earnings at this time with 79 companies in the S&P 500 Index scheduled to report this week. It’s not the actual government shutdown that may encourage investors to lighten up on the long side, but the uncertainty over how long it will last. Investors don’t like uncertainty because they have a hard time assessing the risk of holding positions.

To recap the events since Friday, the U.S. government shutdown on Saturday after a bill that would have kept the government funded through mid-February was voted against in the Senate. This was the first government shutdown since 2013.

The shutdown is expected to linger until a stop-gap measure is passed to break the political deadlock.

According to CNBC, later today at 1700 GMT, the Senate is expected to try to restore federal funding again, whether on a temporary basis or for longer, while trying to fix an issue over immigration. If the vote is successful, the government will reopen on Tuesday.

The global markets finished mixed on Monday with Asia drifting higher and Europe trading flat.

The key earnings reports today will come from Halliburton, Netflix, TD Ameritrade and Brown & Brown. There are no major economic releases today including Fed speakers so we expect all eyes to be on Washington politics.