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Government Shutdowns and the markets

Fred King - Friday, October 04, 2013

With our current government shutdown, many clients have been concerned about how these events have impacted the future of the stock market.  While the future can be different than the past, it can be helpful to review the past to see how the stock market did react to previous government shutdowns.

The information below shows how the S&P 500 performed during the shutdown and then how it performed over a one year time period after the shutdown.

 

S&P 500 Performance During Government Shutdowns

Date of government shutdown

Length of shutdown

Percentage change
during shutdown

Percentage change
one year later

Sept. 30 to Oct. 11, 1976

10 days

-3.42

-5.80

Sept. 30 to Oct. 13, 1977

12 days

-3.18

+12.22

Oct. 31 to Nov. 9, 1977

8 days

+0.69

+1.58

Nov. 30 to Dec. 9, 1977

8 days

-1.24

+3.18

Sept. 30 to Oct. 18, 1978

17 days

-2.0

+2.89

Sept. 30 to Oct. 12, 1979

11 days

-4.42

+24.70

Nov. 20 to Nov. 23, 1981

2 days

-0.09

+10.38

Sept. 30 to Oct. 2, 1982

1 day

—  

+36.16

Dec. 17 to Dec. 21, 1982

3 days

+0.82

+16.87

Nov. 10 to Nov. 14, 1983

3 days

+1.32

-0.37

Sept. 30 to Oct. 3, 1984

2 days

-1.32

+13.31

Oct. 3 to Oct. 5, 1984

1 day

—  

+12.63

Oct. 16 to Oct. 18, 1986

1 day

—  

+18.36*

Dec. 18 to Dec. 20, 1987

1 day

—  

+16.95

Oct. 5 to Oct. 9, 1990

3 days

-2.05

+24.77

Nov. 13 to Nov. 19, 1995

5 days

+1.31

+22.92

Dec. 5, 1995 to Jan 6, 1996

21 days

-0.16/+4.12**

+21.29

 

*The market declined 4.72% year-over-year if the next set of data points are used, given that one year later the crash of 1987 occurred.
**Nov. 13, 1995-Jan. 6, 1996 performance, as the last government closure is generally viewed as one event.
Source: NBC, St. Louis Federal Reserve

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