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The Dow Jones Industrial Average (DJIA) found room on the high side on Wednesday, climbing into a second day of recovery flows and testing territory north of 46,600 before settling back to flat for the day. Another round of Wall Street earnings reports is kicking off the quarterly review period on a high note, with investment bank and luxury handbag earnings outpacing expectations.

Still-rising trade tensions between the US and China are still simmering away on the back burner, and the ongoing US government shutdown remains a key sticking point for global markets, but equities remain focused on earnings, the one blue patch in an otherwise grey sky.

Earnings trump trade wars and non-functioning governments, apparently

Morgan Stanley (MS) and Bank of America (BAC) both beat earnings expectations during the third quarter, rising nearly 6% and 5% respectively, on Wednesday. French luxury goods conglomerate Moet Hennessy Louis Vuitton SE (LVMH) soared over 12% on the day after thumping earnings expectations, further bolstering broad-market expectations that companies will continue to churn out record-setting earnings periods.

Official US datasets remain a large blank space as the Trump administration largely avoids getting involved in solving the federal government’s ongoing funding shutdown. Little indication has been given that the two sides of the US government are in a particular rush to bring an end to the federal closure, sparking comments from Trump aides that a sweeping firing of government workers is now underway. A federal judge in San Francisco issued a sweeping block of any firings by the Trump administration, at the specific request of multiple federal worker unions, a move that will both draw ire from President Trump and further assuage any concerns about long-term fallout from the shutdown for investors.

Investors also continue to brush off any negative outcomes from the government data freeze, largely due to a lack of any official reporting on labor, wages, and employment makes it easier for the Federal Reserve (Fed) to maintain its near-term trajectory of delivering two more interest rate cuts before the end of the year.

Dow Jones daily chart

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