Meena Flyn of Goldman Sachs says that the US GDP will take a hit every week in the government’s shutdown, but the S&P and others track the record high on ‘The Claiman Countdown’.
A partial government shutdown On Wednesday, the Republican and Democrats began on a deadlock at the level of spending, which has increased uncertainty on economic conditions and how the financial markets will react.
It is not clear when the MPs will reach an agreement that allows them to end the shutdown, but experts have estimated that financial markets Meanwhile, the federal government will be relatively surprised by lax financing.
Adam Turnvest, the chief technical strategist at LPL Financial, said in a note that the shutdown “shows a new layer of uncertainty for the markets,” he stated that “they are historically short -lived and as a result, the economy has a minimum impact.”
“Investors have generally seen disruptions related to the previous budget, prioritizing corporate income, comprehensive economic trends, and other major macroeconomic factors,” said the turquist.
Financial markets have historically discontinued a brief government shutdown. (Michael Nagle / Bloomberg Getty Image / Getty Image)
The turquist reported that the US has experienced 20 shutdowns in the last 50 years and said that the average drawdown during a shutdown has been only -1.6%, the worst drawdown is -6.1% pullback in 1979.
He said that during the longest shutdown, which reached 35 days from December 2018 to January 2019, S&P 500 The Federal Reserve held more than 10% rallies to accommodate its policy, “This is a great example of how macro factor matters more to markets than short-term political upheaval.”
The turnquist said that after the previous shutdown, a budget was concluded with the enactment of the resolution, “The average one- one- and three months of the three-month returns were 1.2% and 2.9% respectively.”
A government shutdown is loom: How does it affect the economy?
The House speaks during a press conference with minority leaders Hakim Jeffrees, DNY. (Nathan Posner/Anadolu/Getty Image/Getty Image)
American investment analyst Brett Canewell for Etoro said in a note that investors have seen “a large -scale shutdown drama tune, it has seen it. Political posture Instead of a fundamental market risk, “however he said that the market could see a separate shutdown from a small dissolution.
James McCan, senior economist at Edward Jones, said in a note that “market volatility can be increased as seasonal factors already combine with an uncertain macro background.” He said that while the dollar and US government bonds have usually promoted during the last shutdown, “The fatigue of the market around the ongoing political laxity can reduce that reaction this time”.
He also said that some disruptions can be done government services Affects parts of the economy.
McCan said, “During the previous shutdown, the small business administration discontinued some of its lending and investment programs, denied significant financing for small businesses and limited their ability to rent or invest. Similarly, the time taken for approval on infrastructure projects will increase, which will be expensive.”
He said, “We know that the hiring is currently unusually weak in the American economy and these disruption may be out of work for those Americans to find a new job in the coming weeks,” he said.
The federal government’s financial year 2026 began on Wednesday, which was the first day of the current shutdown. (Kevin Carter / Getty Images / Getty Images)
Anthony Esposito, CEO of Escelonvi Capital, told Fox Business that the benchmark S&P 500 index has increased on a net basis during the last 10 shutdowns, including current Federal Funding Laps.
He said that “on a pure basis, we see a positive return for S&P 500 during those shutdown periods, and if you purify them it is more than 10% in a positive return,” Esposito said.
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However, Esposito said that if this shutdown proves to be particularly tall and “We begin to see less clarity as an economy, the less clearness as far as we are going to end and what the budget will look like, I think you can start pulling back to the market – participating can’t be active sellers, but they cannot have the same effect on the market,”
