US Gov’t shutdown’s limited impact on US Equities

Author: Giles Coghlan | Category: News

Been surprised on how little impact the US shutdown has had?

You may have been wondering why the partial US Gov't has not impacted US equities? Well, I came across this research by Iplresearch which has gone back to all the US Gov't shutdown's since 1976. The takeaway point is that the median returnof the S&P 500 during these times was completely flat at 0.0%.Furthermore, the last US Gov't shutdown in 2013actually saw a 3.1% increase in the S&P 500. That shutdown lasted 16 days and the 1995 shutdown which went on for 21 days also saw a marginal gain of 0.1%.Here is their table:

In the present shutdown The S&P 500 has put in a 3% rise in it's first 9 trading days and moved to a new day and month's high yesterday at 2613.08. See Greg's post here. So, the shutdown is not impacting the US Equities at present. However, how long that will remain the case is uncertain. President Trump is keen to try and get Congress to approve the budget for the US Mexico wall and this is why Trump has camped out refusing to move until his demands are met. See here for a quick reminder on what the main issue is.

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