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fib_1618

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Reply with quote  #1 
Courtesy of "Chart of the Day":

"Monday marked the beginning of the 18th government shutdown in US history. For some perspective, today's chart plots the average S&P 500 performance for the 20 trading days (approximately one calendar month) before and 60 trading days (approximately 3 calendar months) after a government shutdown began. As today's chart illustrates, the stock market has tended to struggle prior to and during the initial three days following a government shutdown. Following this, the stock market has (on average) trended higher over the ensuing three months. One explanation for this particular average pattern is that the market abhors uncertainty. So as the shutdown approaches, investors fear for the worst. However, after the shutdown begins and investors notice that the economy continues to function coupled with the fact that the shutdown may be short-lived ultimately encourages a stock market rally as investors worst fears are not realized. It should be noted that today's chart is an average performance chart and that following the last 17 shutdowns, the stock market traded up 60 trading days after a shutdown on 10 out of 17 occasions (i.e. 58.8%) with the average shutdown lasting 6.4 calendar days"


[cotd100213]

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hiker

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Reply with quote  #2 
Dave, thank you for the informative post about the historic norm following shutdown events.

I saved this from my Twitter feed today, but I cannot personally provide evidence that the data is correct as stated by the author:

9h

8 shutdowns under President Reagan, but none lasted more than 3 days

* Sara Eisen profile: Bloomberg TV.  Foreign exchange.   Bloomberg Surveillance 6-8am weekdays. http://amzn.to/Sqx1Q9


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