Nasdaq, S&P 500 Futures Climb As Traders Shrug Off Government Shutdown Fears — Strategists Divided Over Market Trajectory Heading Into Q4

U.S. stocks are poised to open the new trading week on a positive note, with major index futures modestly higher as of late Sunday, despite concerns about a government shutdown, which could take effect by Tuesday if lawmakers fail to reach a deal on government funding.

Carson Group’s Chief Market Strategist is optimistic about the market momentum continuing through the year. While noting that October is down, on average, and higher only 50% of the time, he said the index has closed the fourth quarter higher in 14 of the past 15 years. 

That said, analysts have cautioned about a stock market bubble building. Evercore strategist Julian Emanuel said, “Odds that a bubble has begun are increasing,” according to Barron’s. He noted that the S&P 500 was trading at 26 times aggregate earnings of the past 12 months, which is in the top decile since 1960. 

As of 11:40 p.m. ET on Sunday, the Nasdaq futures climbed 0.35%, and the S&P 500 and Dow futures were up over 0.25% each.  The S&P 500 and the Nasdaq Composite Index snapped a three-week winning streak in the week ended Sept. 26, while the Dow Jones Industrial Average fell for the first time in three weeks. The weakness emerged amid profit-taking, as the major averages were all poised at new peaks, with traders citing strong economic data that dampened hopes for a rate cut and a poor reception to a five-year Treasury note auction as reasons to lighten their holdings.

The unfolding week’s economic calendar is heavily loaded with speeches by Federal Reserve officials, a few labor market data, including the September non-farm payrolls report, a consumer confidence report, and private sector activity readings from the S&P and the Institute for Supply Management. 

On Monday, Fed Governor Christopher Waller is scheduled to speak at 7:30 a.m. ET, followed by Cleveland Fed’s Beth Hammack at 10 a.m. ET. The National Association of Realtors will release its pending home sales report for August at 10 a.m. ET. Atlanta Fed President Raphael Bostic is scheduled to make a public appearance after the market is closed (6 p.m. ET).

Carnival plc (CCL), Jefferies (JEF), Progress Software (PRGS) and Vail Resorts (MTN) are due to announce their quarterly results on Monday.

Crude oil futures retreated in Asian trading after their substantial gains of last week, while gold futures pushed toward a fresh high and are on the verge of testing the $3,820 level. The 10-year Treasury note slipped to 4.16%, and the dollar weakened against most major currencies as traders weighed in on the impending government shutdown. 

Most major Asian markets advanced, except for Japan, which was weakened by the strength of the yen.  

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