Global markets were generally higher on Friday as the S&P 500 and Nasdaq closed at record highs amid continuing optimism about the US economic outlook and corporate earnings. Judging by the initial market reaction, investors have largely shrugged off Washington legislators' inability to reach a deal and avoid a shutdown of Federal government services over the weekend.
While a shutdown of the US government and uncertainly is rarely market-friendly, investors appeared too focused on earnings gains and the promise of tax-cut bolstered dividends versus the latest round of political brinkmanship. Looking historically, the median return during US government shutdowns has been exactly flat. In fact, during the last shutdown in 2013 we saw an impressive 3.1% gain in the S&P 500 market index.
It appears that for now the ini...
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