Jeffrey O’Connor, Liquidnet’s Head of US Equity Market Structure, commented on the state of US equities amidst the ongoing government shutdown:  

"Despite the data vacuum, what has been delivered has added to market tailwinds – ie CPI and UMich Consumer Sentiment.  Tariff related headlines are slowing, and Trump’s planned meeting with Xi this week appears to be having some structure and substance.  Add in corporate earnings, which have been solid so far, and the tone has shifted considerably from the volatility bump seen in the middle of October.      

Consumer sentiment of late has been mixed, along with a tame CPI, to further support the consensus feeling of interest rate cuts.  Some of the positive sentiment will work to move the perception that these interest rate cuts are being viewed in a vacuum, rather than the beginnings of an interest rate cutting cycle.

As the macro backdrop comes better into scope, or the continued assurance that we are in an interest rate cutting cycle, liquidity health can return to the market.  We’ve seen pockets of late where institutional risk is bringing better block appetite, in a sign of growing confidence.  Delayed government data points will be important to add to that shape, but for now, corporate earnings are providing a barometer of consumer/economic health."