Congress Divided on Budget Negotiations as Government Shutdown Looms: Latest Updates

Congress remains divided on budget negotiations as the deadline for reaching an agreement approaches. GOP hard-liners are refusing to budge on further spending cuts, prolonging the stalemate. If Congress does not come to an agreement before October 1st, the government will face a shutdown.

The current spending laws are set to expire on September 30th, adding urgency to the negotiations. However, House Republicans have sent the chamber into recess, further delaying any progress in resolving the budget impasse. The lack of consensus among lawmakers raises concerns about the potential consequences of a government shutdown.

In other news, the third-quarter earnings for companies in the S&P 500 are showing signs of improvement, according to FactSet’s senior earnings analyst John Butters. While earnings are still forecasted to decline by 0.2%, it is an improvement compared to the initial forecast of a 0.4% decrease.

Furthermore, it marks the fourth consecutive quarter of decline, but the smallest during this four-quarter streak. The individual stock third-quarter per-share earnings estimates have also shown a smaller decline of 0.2% compared to the average decline of -3.6% over the past five years.

According to FactSet, eight of the 11 main sectors in the S&P 500 are expected to post higher year-over-year third-quarter earnings. Communication services and consumer discretionary companies are leading the way with earnings growth, while energy and materials sectors are struggling.

Looking ahead, analysts anticipate further improvement in earnings. Fourth-quarter S&P 500 profits are projected to expand by 8.2% from last year, and the overall growth for 2024 is estimated at 12.2%, a considerable jump from the meager 1.1% in calendar year 2023.

These positive forecasts provide some optimism for the economy, indicating a potential rebound in corporate earnings. However, uncertainties surrounding the budget negotiations and the possibility of a government shutdown continue to cast a shadow over the economic outlook.

In conclusion, Congress remains divided on budget negotiations as the deadline looms. The possibility of a government shutdown adds to the urgency, while GOP hard-liners’ resistance to further spending cuts prolongs the stalemate. On a brighter note, the third-quarter earnings for S&P 500 companies are showing signs of improvement, with an anticipated smaller decline and overall optimism for future earnings growth.