So the government shut down, and you know what the stock market did? Basically shrugged and said “cool story, bro.” Major indices barely blinked, rising less than 1% yesterday like they were watching paint dry instead of democracy temporarily malfunction.
Here’s the thing that’ll blow your mind: historically, when Uncle Sam goes dark, the S&P 500 actually loves it. We’re talking an average 17% gain in the 12 months following shutdowns since 1980. It’s like the market sees politicians fighting and thinks “finally, they’re too busy to mess with us.”
But wait, there’s more! (I know, I sound like a late-night infomercial, but stick with me.) This shutdown is delaying some pretty important economic data – like Friday’s jobs report. You know, the one the Fed uses to decide whether to keep cutting interest rates or start getting stingy again.
Plot twist: ADP dropped their private sector jobs report yesterday, and it was a doozy. They lost 32,000 jobs when everyone expected a gain of 51,000. That’s like showing up to a party expecting cake and finding out someone ate it all. But here’s the weird part – traders were actually happy about this bad news because it means the Fed might keep the money printer going brrr.
The Real Tea: Government shutdowns are basically political theater with extra steps. The average shutdown lasts eight days – just long enough for everyone to remember why we need government workers, then back to business as usual.
This time might be different though. Trump’s hinting at using this shutdown to actually fire thousands (maybe hundreds of thousands) of federal employees. Whether that’s a negotiating tactic or he’s serious about downsizing the government remains to be seen. Either way, it’s spicier than your usual shutdown drama.
Meanwhile, in Shiny Metal Land: Gold just casually broke $3,900 an ounce for the first time ever. Yeah, you read that right. It’s up 48% this year and having its best run since 1979. Silver’s not to be outdone – it hit $47 an ounce, up almost 60% year-to-date.
This isn’t just your uncle buying gold coins from late-night TV ads. Central banks worldwide are hoarding the stuff like it’s the last slice of pizza. Gold is now the second-largest central bank reserve asset globally, trailing only the almighty dollar.
The Bottom Line: While politicians play shutdown theater, smart money is positioning for what history suggests comes next – a nice little bull run. The market’s basically saying “we’ve seen this movie before, and we know how it ends.”
So buckle up, buttercup. If history rhymes (and it usually does), we might be in for quite the ride. Just don’t expect the government to provide any useful economic data while they’re busy not governing.