Washington's Weekend Shutdown

A partial government shutdown entered its third day Monday after Congress failed to pass a funding package by Saturday's midnight deadline. The impasse stems from Democrat demands for immigration enforcement reforms following the fatal shootings of two US citizens by federal agents in Minneapolis.

The Senate passed five spending bills Friday totaling over $1 trillion, covering defense, health, treasury, and transportation through September 30.

Department of Homeland Security funding was carved out separately for two weeks while lawmakers negotiate changes to ICE operations. The package still needs House approval, where Republicans hold just a 218-214 majority.

Market watchers are flying blind. The Bureau of Labor Statistics suspended data releases including Friday's jobs report, which would have provided crucial insights after 2025 saw the weakest employment growth outside a recession since 2003.

The December JOLTS report and metropolitan employment data are also delayed. This marks the second shutdown in four months to black out economic data.

Federal workers are caught in the middle. Air traffic controllers report for duty without pay. Essential Pentagon and Transportation Department functions continue, but paychecks will stop if the shutdown drags on.

FEMA has $7 billion to $8 billion for disaster response as a massive winter storm hits the country, though an extended closure would strain those funds.

The economic stakes are clear. Trump noted last year's 43-day shutdown knocked 1.5 percentage points off GDP. He's now urging lawmakers to pass the Senate package "without delay" and "no changes."

House Speaker Mike Johnson plans a Tuesday vote on the funding package. Democrats want body cameras on agents, warrant requirements, and identification mandates for immigration enforcement operations.

The two-week DHS extension sets up another funding fight by February 13.

Safe Haven Assets Turn Speculative

The metals meltdown accelerated Monday.

Gold dropped as much as 9% before recovering to close down 4.5% at $4,672 per ounce. Silver tumbled 15% early in the session before paring losses to finish down 6.5% at $78.67.

Both metals remain far below record highs of $5,500 for gold and $120 for silver reached last week.

Friday's collapse was historic. Gold suffered its biggest one-day drop since 1983, plunging more than 9%. Silver's 31% crash marked its worst daily performance since 1980.

The trigger was Trump's nomination of Kevin Warsh to lead the Federal Reserve. Warsh, viewed as hawkish on inflation, eased fears about central bank independence that had fueled the precious metals rally.

The mechanics of the collapse reveal how safe haven assets morphed into momentum trades. Leveraged ETFs became increasingly popular during the parabolic rally.

The ProShares Ultra Silver ETF, which offers 2x daily exposure, triggered massive selling during its rebalancing right as silver futures settled Friday afternoon. Heavy retail participation using borrowed money amplified the damage.

CME Group raised margin requirements effective Monday. Gold futures margins jumped to 8% from 6%. Silver margins increased to 15% from 11%. This forced more selling as over-leveraged investors couldn't meet collateral demands.

Bitcoin joined the carnage.

The cryptocurrency dropped below $75,000 Sunday, its lowest level since April and down 40% from October's peak above $126,000. Nearly $590 million in bullish bets were liquidated in 24 hours.

Spot Bitcoin ETFs saw $1.49 billion in outflows last week before reversing with $561.8 million in inflows Monday.

Markets are divided on what comes next. JPMorgan lifted its year-end gold target to $6,300. Bernstein expects bitcoin to bottom around $60,000 before a reversal.

But the deleveraging continues. South Korea's Kospi plunged 5.3% Monday as investors liquidated precious metals positions.

Walmart Joins The Trillion Dollar Club

Walmart's market cap surpassed $1 trillion Tuesday, making it the first retailer to join an exclusive club dominated by tech giants.

Shares climbed 1.6% to reach $126, capping a rally that has delivered 468% returns over the past decade versus 264% for the S&P 500.

The milestone came during new CEO John Furner's first week after Doug McMillon stepped down following 12 years at the helm. McMillon transformed the brick-and-mortar chain into a digital powerhouse through billions in investments that initially compressed operating margins from 6% to just above 4%.

Those bets paid off. Walmart now expects revenue topping $700 billion when it reports results this month, though Amazon will surpass that figure for the first time.

The valuation gap tells a different story. Amazon sits at $2.6 trillion, more than double Walmart's worth.

But Walmart's stock has outpaced Amazon 150% to 53% over five years as investors reward its logistics edge and AI integration.

Delivery speed has become the central battleground.

Amazon delivered 13 billion items same or next day globally in 2025, including 8 billion in the US. The company expanded coverage to 4,000 smaller cities and nearly doubled rural customers.

But Walmart's 4,600 US stores let it offer same-day delivery to 93% of households.

Amazon is playing catch-up in groceries, where it holds just 1.6% market share versus Walmart's 21%.

Internal documents reveal Amazon is building Walmart-style "Supercenter" warehouses and a new distribution layer called 1DC to close the gap. The company is also installing micro-fulfillment centers in Whole Foods locations.

The competitive dynamics favor different strengths. Amazon's online store sales hit $67 billion last quarter.

Its AWS cloud business grew 20% and advertising jumped 24%. These high-margin segments make up a larger revenue share than Walmart's ads at under 1%.

But Walmart trades at 42x forward earnings, near all-time highs, leaving some analysts questioning upside from here.

P.S: Stay tuned for an announcement this week!