Government Shut Down & the Markets

By John Thorpe, Senior Broker

Shut down! Shut down! Shut down!

government

The end of Q3 is now. September 30^th. The pumpkins are ripe, the nights are cool, and the politicians are ICE cold. When most of us awaken tomorrow morning, we will know if the Government is working for us or not. The freeze in dialogue is not unexpected given the growing contentiousness within the body politic.

The Financial news channels I am exposed to have said “We are staring down the barrel?”, “Will this be a chicken Little moment?” the hyperbole is tiring. “It’s a Schumer Shutdown! Trump will cut Medicare! Obamacare is being cut!” The clean Continuing Resolution has been offered.

In the past 28 years, policymakers have passed 134 interim and 4 full-year CRs ranging from 21 to 216 days. (source bipartisanpolicy.org) a continuing Resolution simply maintains government spending for 6 more weeks while Congress can negotiate a lasting spending plan.

We may not get NFP on Friday if the Shutdown occurs or any other economic data reports during a Government Shutdown.

How will the markets react to a government shutdown you ask?

For the S&P 500, S&P 500 Performance During the Last 8 Shutdowns

The table below summarizes the S&P 500’s total return (price change from the close before the shutdown to the close on the resolution day) for each event. Data is sourced from analyses of historical market performance.

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November Class III Milk

November Class III Milk completed its low percentage fourth downside PriceCount objective earlier this month and stabilized. This suggests we may have come far enough to satisfy this phase of the bear move.

The PriceCount study is a tool that can help to project the distance of a move in price. The counts are not intended to be an ‘exact’ science but rather offer a target area for the four objectives which are based off the first leg of a move with each subsequent count having a smaller percentage of being achieved.

It is normal for the chart to react by correcting or consolidating at an objective and then either resuming its move or reversing trend. Best utilized in conjunction with other technical tools, PriceCounts offer one more way to analyze charts and help to manage your positions and risk. Learn more at www.qtchartoftheday.com

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Daily Levels for Oct. 1st, 2025

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