Executive Mosaic’s GovCon Index averted a three-losing streak, while the major US indices ended their slump to start a critical week. However, the equities market remains shaky due to surging bond yields, downward revisions of corporate earnings estimates, and a potential government shutdown.
GCI rose 0.32% to $135.60, while the Nasdaq Composite and S&P 500 rebounded, gaining 0.45% and 0.40%, respectively. After five negative sessions, the Dow Jones Industrial Average (+0.13%) is back in positive territory
Globalstar Inc. (NYSE: GSAT) climbed the most, rising 2.38% to $1.29 to lead 22 other advancers with modest gains. Fluor Corporation (NYSE: FLR) was the top decliner, sliding 1.84% to $36.19.
Meanwhile, a government shutdown is on the horizon unless the House and Senate reach a favorable outcome in their federal budget negotiations on or before September 30, 2023. The Office of Management and Budget (OMB) has advised federal agencies to review and update their shutdown plans if Congress fails to pass a federal spending bill by the deadline.
In case of a shutdown, essential workers will continue to report for work on October 1 but without pay. However, about four million workers, including military troops and personnel, will be on furlough. Government employees will receive back pay when the shutdown ends, but not federal contractors.
Moody’s Investment Service also warned that a government shutdown would affect the United States’ outstanding triple-A credit rating. The ratings agency said a protracted shutdown would have a more pronounced effect than a short-lived one.
