A government shutdown is ahead after the Senate failed to pass a short-term spending bill prior to the midnight deadline on Friday. Differences related to immigration policy appear to be the largest roadblock. The last shutdown in 2013 lasted for 16 days and was related to the controversial Affordable Care Act. This week, GE shocked investors as the CEO announced the potential for a breakup and that the company would take a $6.2 billion write-off and set aside $15 billion to bolster insurance reserves. Initial jobless claims came in far lower than expected continuing to provide evidence of a tight labor market and the potential for wage increases.
Yields continued to rise with the 10-Year Treasury notching above 2.6% — hitting levels not seen since 2014. US stocks continued their record breaking rise and emerging market stocks dominated last week as relatively stable oil prices, strong growth data from China and a two year high on the yuan all culminated to support growth in emerging countries. Traditional bond funds declined and the bellwether benchmark is now down 1.1% year to date. The increased projections for US debt levels combined with a reduction in Federal Reserve may continue to push longer-term rates higher this year.