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Illustration: Lazaro Gamio/Axios

The Dow closed higher for the week on Friday for the fifth straight time. But rather than celebrate the market's remarkable bounce-back since its Christmas Eve nadir, investors have publicly focused on what has or could go horribly wrong.

What they're saying: "The idea that there will be a global recession, either this year or next, is now close to consensus," analysts at Fathom Consulting wrote in a note published after Friday's market close.

Interestingly, the flow of dollars has told a different story.

  • Fathom's comments came just a day after data from Rifinitiv/Lipper showed investors had injected $5.8 billion into ETFs and mutual funds for the week, with the majority going to equity funds.

What it means: While they're continuing to buy stocks, fund managers and analysts are beginning to worry out loud that the partial government shutdown that ended on Friday — at least temporarily — will come back to haunt the market.

  • "While the S&P 500 index is up more than 5 percent since the start of January, money managers including Federated Investors, Baron Funds and Hodges Capital Management are bracing for a powerful knock-on effect on the consumer," Reuters reported Friday.
  • "The market right now is treating this like a hurricane, where you know there will be an economic impact but you tend to discount any hit to the data because you know there will be some catch up," Steve Chiavarone, a portfolio manager at Federated Investors told Reuters. "But here's what's dangerous about that approach: the sample size is zero for shutdowns this long."

The shutdown left around 800,000 federal workers without pay for 35 days, and U.S. consumer confidence fell by the most in three years this month.

  • "The sentiment-driven rebound, or buying justified by the argument that the selloff went too far, is coming to an end," Dennis Debusschere, the head of portfolio strategy at Evercore ISI, wrote in a note to clients. "Another sharp decline remains a low probability event, but new energy is needed to push the market meaningfully higher near term."

Go deeper: Shutdown estimated to cost U.S. economy $3.6 billion so far

Go deeper

Dominion sends cease and desist letter to My Pillow CEO Mike Lindell

Photo: Stephen Maturen/Getty Images

Dominion Voting Systems on Monday sent a cease and desist letter to My Pillow CEO Mike Lindell over his spread of misinformation related to the 2020 election.

Why it matters: Trump and several of his allies have pushed false conspiracy theories about the company, leading Dominion to take legal action. It's suing pro-Trump lawyer Sydney Powell for defamation and $1.3 billion in damages, and a Dominion employee has sued Trump himself, OANN and Newsmax.

Off the Rails

Episode 5: The secret CIA plan

Photo illustration: Aïda Amer, Sarah Grillo/Axios. Photo: Zach Gibson/Getty Images

Beginning on election night 2020 and continuing through his final days in office, Donald Trump unraveled and dragged America with him, to the point that his followers sacked the U.S. Capitol with two weeks left in his term. This Axios series takes you inside the collapse of a president.

Episode 5: Trump vs. Gina — The president becomes increasingly rash and devises a plan to tamper with the nation's intelligence command.

In his final weeks in office, after losing the election to Joe Biden, President Donald Trump embarked on a vengeful exit strategy that included a hasty and ill-thought-out plan to jam up CIA Director Gina Haspel by firing her top deputy and replacing him with a protege of Republican Congressman Devin Nunes.

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Annelise Capossela/Axios

  1. Health: CDC director defends agency's response to pandemic — CDC warns highly transmissible coronavirus variant could become dominant in U.S. in March.
  2. Politics: Empire State Building among hundreds to light up in Biden inauguration coronavirus tribute.
  3. Vaccine: Fauci: 100 million doses in 100 days is "absolutely" doable.
  4. Economy: Unemployment filings explode again.
  5. Tech: Kids' screen time sees a big increase.