To The Moon

The deal-signal is meaningful — but it is not a unilateral ignition switch.

Context

Shutdown-risk is a liquidity drag and confidence drag, not a valuation input by itself.

When headlines suggest resolution, algos remove the “policy impairment discount” and risk assets naturally retrace intraday — which is exactly what you saw yesterday.

However — the next leg up still requires two confirmations:

1. that the shutdown actually ends, not merely “intent to negotiate”

2. that the short-term resolution does not re-introduce a new cliff in 4–8 weeks

The proposed structure — reopen now + ACA tax credit extension separated — is politically elegant, but markets will only reward the signed outcome, not the floated idea.

So next week — what is the probability of a re-round?

Positive skew exists — policy uncertainty removal is a tailwind.

Magnitude is likely modest — because positioning is no longer light, and the shutdown was not the sole driver of weakness.

If the bill clears procedurally, the market reaction is likely:

> Not a “rip” — but a clean re-pricing higher of 0.8% – 1.5% type range, assuming no competing destabiliser hits tapes.

Investor stance

Short-term traders:

fade intraday panic, not post-resolution euphoria

Medium-term investors:

maintain core exposure

add hedges only on sharp green days (not on red hours)

In summary: resolution helps.

A rebound is plausible.

But the shutdown was a brake, not the engine — so the rebound will reflect that.