Government shutdown = market down?

G

gstillson

Recycles dryer sheets
Joined
Jun 16, 2018
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Staying very non political but just wanting to see what your opinion of the market will be tomorrow considering it is looking tonight like the house and senate have very different ideas about a spending bill.

On the one hand, we have been down this road several times in the past and the market might shrug it off if there is any other reason to rally.

On the other hand, it is a reason for stocks to sell off and they have been selling off this whole week.
 
The market was up in after hours trading .74% despite all of Thursday's news. That means something. It could be down on Friday but I don't see it staying down.
 
It is uncertainty and that mean normally down...


Most people now are talking about the market being oversold.... I keep on keeping on as it has worked for me for years... I did sell some in a ROTH to increase my cash position a few days ago as I was really low on cash to pay expenses... otherwise... holding...
 
Texas Proud said:
It is uncertainty and that mean normally down...


Most people now are talking about the market being oversold.... I keep on keeping on as it has worked for me for years... I did sell some in a ROTH to increase my cash position a few days ago as I was really low on cash to pay expenses... otherwise... holding...
Click to expand...

+1
Any news these days which is unusual causes losses; at least until we get to 20% down IMHO.
 
I don’t think it is just news that drives market drops. Sometimes the equity market simply gets way overextended, and correcting that situation can be sudden and brutal.

When I look back I see a big run up in late 2017 corresponding to the tax cut excitement on top of a very frothy market which had already had a big run up since late 2016. So now we are giving a big chunk of that back.

OK so we’ve given the tax cut run up back. We still are way ahead with most of the late 2016 and 2017 gains.
 
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There is no way anyone can attribute any market change today to "aha yup that's because the shutdown". Because the news has way too much stuff in it that spooks the market.

Any of the half-dozen headlines of the past 72 hours, individually, would rattle a firm market.
 
Aerides said:
There is no way anyone can attribute any market change today to "aha yup that's because the shutdown". Because the news has way too much stuff in it that spooks the market.

Any of the half-dozen headlines of the past 72 hours, individually, would rattle a firm market.
Click to expand...

I agree. We regularly pillory the media, but then accept their random associations beteeen equity market moves and news headlines as legitimate explanations.

Short term changes in equity markets are behavioral, and as such, are emotional reactions to ... whatever.
 
I'm more worried about the debt ceiling in February. I think the willingness to shut down Government and other anxiety/chaos provoking actions coupled with the imminent release of the Mueller report could lead to a debt ceiling crisis. I have always thought both sides of the Congress have enough sense not to default on the nation's debt but they may not be able to call the shots this time around.
 
Is it not this time of year when people take profits, sell dogs, or re-align their portfolios anyway? Not wanting to go into the NY with unwanted stock or taking profits for this tax year. Folks may just be doing it early this year because of all the geopolitical uncertainty.

I know there is also normally a Santa Rally this time of year, but this year can hardly be considered normal, it is just a thought.
 
I remember when we had that furlough back in 2013, that lasted pretty much the first half of October, the stock market was choppy, but still ended up trending upward. I think my portfolio saw a gain of around 1.2% in those ~2 1/2 weeks.
 
IMO, much ado about nothing. I'd think by now the markets would be immune to such noise as there are so many other sources right now.
 
Portfolio still in positive for Dec. 2017-Dec. 2018. .8% but still positive. Thank you bond funds. Three year showing +6%. Be nice if three years from now, +6%.
 
Market seems to be spring-loaded to the down side and reacting to negative news, so I'm not sure that past shutdowns are good predictors of what will happen this time.

That said, there is so much news going simultaneously right now, it will be impossible to discern if the shutdown is the actual trigger of a market move.
 
As of now, market seems to enjoy the craziness going on in the world. Maybe it has a sense of humor?
 
In my experience, the market seems to be pretty good at knowing the difference from a self-inflicted political "crisis" and a real crisis, and mostly ignores the former.
 
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