Can The Rally In Stocks Continue Into Year End? | Lance Roberts

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**Lance Roberts** (1:03)
As long as this bullish trend remains intact, I would just keep buying these dips through the end of the year. Now, at some point, you're going to get a bigger correction. You know, a test of the 50-day moving average is not out of the question. You know, even a test of the 20-day, 200-day moving average is certainly not out of the question either. But, you know, I just don't really kind of see that happening over the next couple of months.

**Adam Taggart** (1:30)
Welcome to Thoughtful Money. I'm Thoughtful Money Founder and your host, Adam Taggart, welcoming you back here at the end of the week for another weekly market recap featuring my good friend, the mothballed portfolio manager, Lance Roberts. Lance, how are you doing?

**Lance Roberts** (1:43)
Fine, yes. I've got moths in my closet.

**Adam Taggart** (1:49)
You know, I was trying to think of a good word for shutdown, because we hit news this week is the government shutdown. So mothballed was the best I could do on short notice.

**Lance Roberts** (1:57)
I like it, I like it. Yeah, we have nothing to talk about because we have no data to work with.

**Adam Taggart** (2:04)
Yeah, I know the jobs data was supposed to come out today, and everybody was sort of worried about what if we don't get it. It's kind of like, what if we don't get that data that nobody really believes anyways and it's going to get revised after they tell it to us?

**Lance Roberts** (2:15)
Well, that's kind of the comment we made on our show on Thursday. I was talking with Michael Leibowitz, and that was the conversation was talking about, oh my gosh, now this government shut down. Now we won't get CPI data and employment data. And I'm like, who cares?
Nobody really believes that data anyway. You get the data and then you revise it all. But that's the logical side of us. But in reality, the market clings to that data only from the standpoint of what does that mean for the Fed? Will they cut rates or not? In this whole last couple of years, really since October of 2022, when we hit that bottom, this whole market rally has been based on will the Fed cut rates? How much are they going to cut rates? And we just go from, we just drift from one employment report to the next CPI report to the next employment report to determine if we should pay more for stocks. It's just ridiculous, but here's where we are.

**Adam Taggart** (3:09)
Here's where we are. Well, look, I have this question to ask you later. I may as well ask it now. What impact, if any, do you expect it to have market-wise?

**Lance Roberts** (3:21)
None. We actually did a study this week in our daily market commentary, looking back at past government shutdowns, and the market's up 85% of the time. Yields typically fall during shutdowns.
It has very negligible impact on markets at all. I mean, it may give them a little bit of wiggle, but it doesn't have any real impact. Because at the end of the day, and again, when you look at the markets where we are right now, people are just chasing momentum at the moment. It really has nothing to do with the economic data or even the fundamental data. I mean, we've got stocks trading at 40 times valuations. Nobody cares about that. That's just a function of sentiment. So again, it's interesting to watch the media get all breathless over them. Like, oh my gosh, it's a government shutdown. What does that mean? But let me clear up a few things here real quick. Let's do talk about what a government shutdown does mean, and what it doesn't mean. Because every time we have a government shutdown, there's always the media headlines. We're going to default on our debt. Senior citizens aren't going to get their paychecks. Military won't get paid. That's all hogwash. In a shutdown, anything mandatory in the budget is paid. That is paid regardless of whether the government is in shutdown or not. If you are involved in any type of protection of property, personal safety, national security, your job is secure. You keep working. The only people that are furloughed are what's called non-essential workers, and these are people that fall outside those categories, primarily in things like parks and recreation, government employees related to the BLS, the Bureau of Economic Analysis. Those employees get to go home on a paid vacation, mind you. They are furloughed. They don't get paid while they're laid off, but as soon as they come back, they get fully reimbursed for all of their time. So the interest on the debt gets paid. We will not default on our debt. Social Security checks will go out on time. Social Security recipients will get their checks. Military veterans and military benefits will all be paid on time. Because why? That is in the mandatory spending category of the budget. That only 25% of the budget is discretionary, and that's the only amount of money that's affected by a shutdown. So that's the basics of it.