LIVE MARKETS-Shutdown drags on, but Goldman sees light at mid-November

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SHUTDOWN DRAGS ON, BUT GOLDMAN SEES LIGHT AT MID-NOVEMBER

One of America's longest and most sweeping government shutdown may finally be nearing its end, with Goldman Sachs betting on a mid-November resolution as pressure mounts on lawmakers to break the deadlock.

The funding lapse began October 1 after Congress failed to pass a spending bill, shuttering most federal agencies and sidelining hundreds of thousands of workers. Unlike previous standoffs that spared key departments, this one has hit everything from food aid to air traffic control.

Goldman estimates the six-week freeze will slice 1.15 percentage points off annualized GDP growth in the fourth quarter, before a sharp 1.3-point rebound early next year as delayed federal spending floods back. Prediction markets now put even odds on reopening by November 15 and less than a one-in-five chance the shutdown drags past Thanksgiving, the bank said.

The standoff has scrambled the economic calendar as well, with key jobs and inflation reports withheld. Goldman expects October figures to be bundled with November's, and November's jobs and CPI likely delayed to early or mid-December.

The lack of timely data has left the Federal Reserve as well as investors flying blind, with the central bank weighing its next move without the usual data compass.

Wall Street, however, has kept its cool. The S&P 500 .SPX notched a 2.3% gain in October, its sixth straight monthly rise – the longest winning streak since 2021. The Nasdaq chalked up a seventh consecutive advance, while the Dow booked its sixth, marking their best runs since early 2018.

(Pranav Kashyap)

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