What Happened?
A number of stocks fell in the afternoon session after investor uncertainty heightened by the ongoing U.S. government shutdown. In its second week, the shutdown delayed the release of crucial economic data, including the September jobs report and weekly unemployment claims. This lack of fresh information complicates decision-making for both the Federal Reserve and investors, who rely on these metrics to gauge the economy's health. Without this data, assessing the path of inflation and the labor market becomes more challenging, leading to a cautious sentiment. Major indices like the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average all retreated as market participants reassessed their positions amid the data vacuum and awaited more clarity.
In addition, Jamie Dimon raised concerns about a market correction. He added, "I would give it a higher probability than I think is probably priced in the market and by others, so if the market is pricing in 10%, I would ... say it's more like 30%." Dimon's remarks are closely watched given his influence as head of one of the nation's largest banks.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Specialty Finance company Sixth Street Specialty Lending (NYSE: TSLX) fell 3%. Is now the time to buy Sixth Street Specialty Lending? Access our full analysis report here, it’s free for active Edge members.
- Specialty Finance company New Mountain Finance (NASDAQ: NMFC) fell 3.2%. Is now the time to buy New Mountain Finance? Access our full analysis report here, it’s free for active Edge members.
- Specialty Finance company Ares Capital (NASDAQ: ARCC) fell 3.3%. Is now the time to buy Ares Capital? Access our full analysis report here, it’s free for active Edge members.
Zooming In On Ares Capital (ARCC)
Ares Capital’s shares are not very volatile and have had no moves greater than 5% over the last year.
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