### Summary
The US economy and markets appear to be in good shape, with a strong stock market, low inflation, and low unemployment. However, there are potential risks on the horizon, including the impact of the Federal Reserve's monetary tightening, supply and labor shocks from the pandemic, political polarization, and the possibility of another government shutdown. While the overall outlook for investing remains uncertain, it's important for investors to prepare for any eventuality.
### Facts
- The US stock market is close to its 2022 peak, inflation is less severe than a year ago, and the economy remains strong with low unemployment.
- The Federal Reserve has raised interest rates by 5 percentage points, which could lead to economic growth faltering.
- The US economy is facing supply and labor shocks from the pandemic and commodity shortages caused by Russia's war with Ukraine.
- Falling prices in China could contribute to disinflation in the US and elsewhere.
- Political polarization in the US and the possibility of another government shutdown could negatively impact the economy and markets.
- Despite the resilience and stability of the economy and markets, there are still risks to consider, including a crisis in commercial real estate and the potential for inflation to flare up again.
- Some economists and surveys predict a 50% probability of a recession occurring within the next 12 months.
- Investing should be based on a long-term outlook and a diversified portfolio, with cash on hand to cover expenses.
Note: Due to the nature of the text provided, some of the facts may be subjective or based on the author's opinion.
Goldman Sachs analysts predict that the U.S. government is "more likely than not" to shut down later this year due to spending disagreements, which could temporarily impact economic growth by reducing it by 0.15-0.2 percentage points per week, with past shutdowns having minimal impact on equity markets.
A pseudonymous analyst warns that a weak stock market could trigger a sell-off in the crypto market, advising against bullish positions in both markets.
The potential government shutdown threatens to deprive the Federal Reserve of crucial data on the labor market and inflation, which could hinder its ability to make informed decisions about the economy and interest rates.
Investors are becoming increasingly cautious about the US stock market and the economy as 2023 draws to a close, leading to a more defensive investment approach by Wall Street banks and experts warning of potential pain ahead.
The White House warns that a government shutdown at the end of the month could have damaging consequences for the economy, national security, and the American public.
Investors shouldn't worry about a government shutdown as it is unlikely to have a significant impact on the markets.
President Biden warns of the potential consequences of a government shutdown, urging Republicans in Congress to take action to prevent it.
A potential government shutdown in the U.S. could negatively impact the country's credit rating, highlighting weaknesses in institutional and governance strength, according to Moody's Investors Service. The economic impacts would be concentrated in areas with significant government presence, and the severity of the effects would depend on its duration. If prolonged, it could have a more pronounced effect on business and consumer confidence as well as financial markets.
A government shutdown could have dangerous consequences for the nation's cyber defenses and efforts to combat violent crime, warns Deputy Attorney General Lisa Monaco.
The impending government shutdown may have an impact on the financial markets, according to Kristina Hooper, Chief Global Market Strategist at Invesco.
A government shutdown in the U.S. could cause significant disruptions in the stock and bond markets, with the Securities and Exchange Commission being forced to furlough most of its staff and leaving the market oversight at a "skeletal" crew level.
A majority of Wall Street investors are concerned about the stock market's gains in 2023 and believe that it could retreat further as the risk for a recession increases.
A government shutdown would severely impact the U.S. Securities and Exchange Commission's ability to approve IPOs and respond to market turmoil, according to its chair, Gary Gensler.
Investors are concerned about the recent stock market decline due to surging oil prices, rising bond yields, and worries about economic growth, leading to a sell-off even in major tech companies and potentially impacting President Biden's approval ratings.
A potential government shutdown threatens to delay real estate transactions and leave home buyers unable to secure flood insurance, causing significant disruption to the industry.
Investors are increasingly fearful due to a mix of factors including rising oil prices, expectations of higher interest rates, a sluggish Chinese economy, and the possibility of a US government shutdown, leading to concerns of a prolonged period of stagflation and a potential recession.
Millions of Americans anticipate a government shutdown as Congress struggles to pass a budget, potentially causing a short-term stock market gain.
U.S. Treasury Secretary Janet Yellen warns that a potential government shutdown would harm economic progress, impacting key programs for small businesses and children and delaying infrastructure improvements.
A government shutdown could lead to disruptions in food aid, air travel, and financial markets, and increase the risk of cyber attacks on critical financial infrastructure, according to Karen Petrou of Federal Financial Analytics Inc.
The United States government is at risk of a partial shutdown, which could impact the progress of crypto bills and hinder the functioning of financial regulators.
Despite a strong year for the stock market, concerns about inflation, rising interest rates, and a possible recession are making investors question the safety of investing in stocks at the moment.
Investors will be closely watching market reactions to a late deal to avert a government shutdown, as well as key data on the labor market this week, while concerns about higher interest rates and the impact on the economy weigh on stock futures.
