The optimism in markets today isn’t just the shutdown ending, it’s how it ended | investingLive

US stock futures are substantially higher today with S&P 500 futures up 0.9% and all the headlines around the gain are about the US government shutdown ending. Yes, it’s good news but the market never really sold off on the shutdown and it was obviously in the endgame when flight started being cancelled.

You can argue some political tailrisks were trimmed like ending the filibuster but I don’t think that was a real risk anyway.

What I think can lead to an extended rally in stocks is the way the shutdown ended. Democrats in the Senate folded. There is some real nuance but at the end of the day, the party divided. With the election in New York and that, it’s a party that doesn’t really stand for anything besides being anti-Trump. That’s ironic given that the Republican Party doesn’t stand for much aside from being pro-Trump.

The thing is, Trump’s defining feature in the eyes of the market is that he needs the constant validation of a rising stock market. He measures himself based on equity prices and constantly touts record highs.

Said differently, the divide in the Democratic Party means we’re more likely to see Republicans hold the majorities in the Senate/House and that’s good for stocks. That sweep stance is also good for gold as it means the fiscal recklessness is likely to continue.