Countdown To US Government Shutdown: How Could It Impact The Stock Market?
Portfolio Pulse from Piero Cingari
The U.S. government is facing a potential shutdown due to budget negotiations deadlock in Congress. The White House warns of potential damage to the economy and national security. Goldman Sachs predicts a temporary shutdown is increasingly likely, which could reduce quarterly annualized growth by around 0.2 percentage points for each week it persists. Historically, financial markets have not shown significant reactions during government shutdowns, with the S&P 500 recording above-average returns in the year following a shutdown.
September 20, 2023 | 4:13 pm
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POSITIVE IMPACT
The SPDR S&P 500 ETF Trust (SPY) could potentially see positive returns in the event of a government shutdown, based on historical data.
Historically, the S&P 500, tracked by SPY, has shown positive returns in the year following a government shutdown. This suggests that despite the potential economic impact of a shutdown, the market may remain resilient.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 80