Stock index futures drop as federal government shut down

[A deserted Union Station in Washington DC]
Marvin Bowser/iStock via Getty Images

Stock index futures pointed to a lower open Wednesday, but Treasury yields were steady as the government enters shutdown mode [https://seekingalpha.com/news/4500390-us-government-shutdown-officially-begins].

Safe-have demand was evident, but there wasn't too much alarm on Wall Street. Gold (XAUUSD:CUR [https://seekingalpha.com/symbol/XAUUSD:CUR]) topped $3,900 for the first time [https://seekingalpha.com/news/4500403-gold-notches-another-record-high-as-us-government-shutdown-begins], while the greenback (DXY [https://seekingalpha.com/symbol/DXY]) is down. Most of the concern looked to be about the markets flying blind without official government data. (The BLS has just one employee working now, deputy commissioner William J. Wiatrowski.)

In the absence of jobless claims and nonfarm payrolls figures that were expected this week, the ADP report on September private payrolls will get unprecedented attention. Econoimsts expect a rise of 65,000 for ADP, but many experts are skeptical of the quality of the data.

Prediction markets have the shutdown lasting about 10 days.

Deutsche Jim Reid said "markets historically have taken shutdowns in their stride." "In fact, the S&P 500 rose in the last 6 shutdowns, and 10yr Treasury yields came down in the last 5. Clearly there were other factors in operation as well in these periods, but it shows that for markets at least, the usual pattern is to look through what’s happening."

BY THE NUMBERS

Dow futures (INDU [https://seekingalpha.com/symbol/INDU]) slid 262 points, or -0.56%, to 46,135.98. S&P 500 futures (SPX [https://seekingalpha.com/symbol/SPX]) dropped 43 points, or -0.65%, to 6,645.08, while Nasdaq 100 futures (US100:IND [https://seekingalpha.com/symbol/US100:IND]) tumbled 192 points, or -0.78%, to 24,488.42.

The 2-year yield (US2Y [https://seekingalpha.com/symbol/US2Y]) edged down 0.4 basis points to 3.61%, while the 5-year yield (US5Y [https://seekingalpha.com/symbol/US5Y]) slipped 1 bp to 3.74%. The benchmark 10-year yield (US10Y [https://seekingalpha.com/symbol/US10Y]) held near 4.15%, up 0.2 bps, and the 30-year (US30) ticked up to 4.74%. Shorter maturities were steadier.

Gold (XAUUSD:CUR [https://seekingalpha.com/symbol/XAUUSD:CUR]) rose +0.79% to $3,889.75, silver (XAGUSD:CUR [https://seekingalpha.com/symbol/XAGUSD:CUR]) gained +1.44% to $47.33, and crude oil (CL1:COM [https://seekingalpha.com/symbol/CL1:COM]) edged lower, down 27 cents, -0.41%, to $62.10.

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