Where We're Focused During This Shutdown Logjam

On Monday, the S&P 500 closed at a record high again, marking its 32nd record close this year. Not to be left out, for the Nasdaq, it was its 31st record close of 2025, and, yes, based on their respective RSI readings, both market indices are in an overbought condition.

The U.S. government shutdown enters its seventh day on Tuesday, and despite another vote that could end the shutdown set for late in the day, prediction market Kalshi now sees the shutdown lasting for 18.5 days.

We have several Federal Reserve speakers making the rounds on Tuesday, including Atlanta Fed Bank President Raphael Bostic, Fed Chair for Supervision Michelle Bowman and Fed Board Governor Stephen Miran. We will want to see what they have to say, but odds are the market will be looking more at what Fed Chair Jerome Powell will say Thursday at 8:30 a.m. ET. Powell is set to speak at a community bank conference, and we, along with everyone else, will be looking to see what he may say about the economy and monetary policy.

One big swing factor that could influence those comments is whether we see the President Trump administration enact those “massive layoffs” of federal workers that have been bandied about. Such “reductions in force” would go beyond the typical shutdown furloughs, where federal workers are hired back once the government reopens.

Our view has been that this threat was more of a negotiating tool, and for now, that threat remains in the air, given Trump’s comment on Monday that if the shutdown continues, “It could, at some point it will, trigger layoffs.” Trump also suggested on Monday that he was already in talks with Democrats about their healthcare demands, but Democratic leaders batted down that claim, emphasizing that they stand ready to negotiate.

The question is which side will blink first? And if there is no blinking and those layoffs are enacted, how “massive” will they be?

If all this sounds like “pretty much the same” compared to a few days ago, we agree. But let’s remember too that the longer the shutdown goes on, the greater the impact the economy will feel from all those furloughed workers. Yes, they tend to get back pay once the government re-opens, but the longer it's shut, the bigger the speed bump the economy will have to roll over.

What We’re Doing in the Meantime

While we wait to see what breaks this logjam and how it impacts the economy, we’re going to continue the work we started on Monday when we added shares of Hershey (HSY) to the Bullpen. By that we mean, examine new candidates for the Portfolio and Bullpen so we can take advantage of what emerges from the shutdown, be it a pullback in the market or something else. And if we need to make a prudent move or two, we'll heed that discipline as well.

We’ll also heed Tuesday's latest gaggle of Fed speakers, and peer into quarterly results out on Tuesday morning from McCormick (MKC) . Inside McCormick’s results, we’ll be interested in what it says about pricing, the trend in its input/ingredient costs, and margin prospects. If that sounds familiar, given our comments on Monday about HSY, it should.

And should we get a deal that ends the shutdown that avoids those massive layoffs, it would be a catalyst for us to revisit shares and potentially add to our positions in Dutch Bros (BROS) and Costco (COST) .

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At the time of publication, TheStreet Pro Portfolio was long BROS and COST.