
Hold onto your portfolios!
The US government is dancing on the edge of a shutdown, and Goldman Sachs has sounded the alarm.
As the clock ticks to the end of the month, Congress is in a heated tug-of-war over the nation’s budget.
History buffs take note: Congress hasn’t been on time with all its spending bills since 1997.
And now, with zero bills passed and the shutdown odds over 50%, is Wall Street about to feel the heat?
September’s stock rollercoaster has already given investors quite the ride, eyeing its worst monthly losses since the year began.
Flashback to the last Congress budget drama: the S&P 500 plunged a whopping 2.7% on day one of the shutdown.
But, there’s a silver lining.
Past shutdown showdowns have proven that investors might have little to fear.
Historical data shows: that during 20 past shutdowns, the S&P 500 remained cool and collected.
And in some shockers, stocks shot up, even gaining a stellar 10% post the 2018-19 drama.
And here’s the kicker: Long shutdowns?
Markets say, “No biggie.”
A quick rebound is the norm.
Even during the longest-ever 35-day shutdown saga.
The Wells Fargo bigwigs are dropping some wisdom, noting that stock pullbacks may be just a blip, as history showcases quick rebounds post-reopening.
However, the bigger concern?
The cascade of other storm clouds gathering over the US economy.
We’re talking about a shaky labor market, soaring interest rates, and the nightmare of student loans making a comeback.
A shutdown could punch the GDP, dragging it down every week.
Goldman Sachs is betting on a 2-3 week shutdown stint.
The verdict from stock gurus?
Shutdowns are like a blip on the radar.
The real challenge? A slew of other obvious issues.
As Wells Fargo pros advise, play it safe, and prep for the turns, twists, and possible recession.