Stocks, USDJPY Tumble After McConnell Reportedly "Planning For Govt Shutdown"

Update: After President Trump earlier criticized the stopgap spending bill, saying provisions to extend CHIP should only be included in a long-term plan, a White House aide told Bloomberg that the president does, in fact, support the stopgap spending measure which is coming for a vote in the House tonight.

The clarification follows a warning from Senate Democratic leader Chuck Schumer, who warned that the chances of the House plan clearing in the senate “don’t look good.” Specifically, Schumer cited a lack of funding for the opioid crisis as one reason it likely won’t pass – but of course the biggest obstacle is the impasse on a plan to enshrine the DACA protections for 690,000 undocumented immigrants who were brought to the US as minors into law.

News of Trump"s support helped mitigate a drop in the dollar and US stocks, which are becoming increasingly sensitive to the notion that there"s a strong chance of a shut down this weekend.

 

 

 

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While it has been clear that the government shutdown deadline is looming, stocks haven"t cared.. until now. Politco reports that Senate majority leader Mitch McConnell is making contingency plans for the growing possibility of a government shutdown.

USDJPY, and therefore stocks, tumbled on the headlines...

As Politico details, the Senate majority leader intends to keep the chamber in session through the weekend and stage a series of votes designed to put Democrats from conservative states on defense, according to two Republican sources familiar with his plans and an email sent by McConnell on Thursday and obtained by POLITICO.

The goal would be to place the blame for a shutdown squarely on 10 Democratic senators up for reelection this fall in states won by Donald Trump in 2016, and make them the face of a government closure.

The strategy is risky for Republicans, considering that they control the White House and Congress Washington. Should funding lapse at midnight Friday, McConnell would keep the Senate in session and try to force Democrats to repeatedly vote against funding for children’s health care money and government spending.

This comes after President Trump warned that a shutdown is likely.

In brief remarks made during a visit to the Pentagon, Trump told reporters it’s possible that a government shutdown "could happen, we’ll see what happens," adding it’s "up to the Democrats."

Trump added that the military would "lose big" in a partial govt shutdown, "and we’re never letting our military lose at any point"