JTH
TSP Legend
- Reaction score
- 929
Time: 2025-10-02 12:44 (Europe/Warsaw)
Intela Brief: U.S. Government Shutdowns — History, Duration, and Market Performance
Grades: Sources A/B | Signal: Medium | Bias: Mixed
Conclusion
Since the late 1970s, shutdowns have been short and episodic, with only two lasting beyond three weeks (1995–96 and 2018–19). Stocks usually hold up or rise during and after shutdowns; the big 2013 and 2018–19 cases coincided with S&P 500 gains. So what: unless this one drags on for weeks and obscures key data, history suggests limited equity damage in week one and a tendency to grind higher after.
Flows / 
Breadth / 🛢 Rates — Key history snapshots
• Funding gaps since 1977: Most lasted 1–3 days; notable outliers were 21 days (Dec 1995–Jan 1996), 16 days (Oct 2013), and 35 days (Dec 2018–Jan 2019) — the longest on record. History, Art & Archives+2Congress.gov+2
• Equities during shutdowns: On average, near flat to slightly positive; 2013 rose ~3.1% during the 16-day lapse, and 2018–19 rose ~10% over the 35-day stretch; 10-yr yields tend to dip a few 0.01% steps. Business Insider+2Yahoo Finance+2
• Mixed aggregates: Some estimates say the average shutdown saw ~–1.6% for the S&P 500 across episodes, underscoring method differences but the same takeaway: no consistent damage. Investopedia
🗂 Mini-timeline (durations & market color)
• Nov 1995 (5 days) & Dec 1995–Jan 1996 (21 days): Long political standoff; equities volatile but no lasting bear turn tied solely to the shutdown. History, Art & Archives
• Oct 2013 (16 days): S&P +~3.1% during the lapse; bonds steady to slightly firmer as yields eased. Business Insider
• Jan 2018 (2–3 days) & Feb 2018 (hours): Too brief to matter for trend. History, Art & Archives
• Dec 2018–Jan 2019 (35 days): Record length; S&P climbed ~10% amid a broader rebound from the Dec 2018 trough. Business Insider
Possible TSP Consequences (history-guided, not advice)
• USD: Little pattern; can soften at the margin if data delays mute Fed clarity. Reuters
• AGG: Small bid from “safety”; 10-yr often slips a few 0.01% steps during lapses. LPL Financial
• SPY: Historically flat to up during; tends to grind higher 1–3 months after. Vanguard
• IWM: More sensitive to contracting/permits delays; relative underperformance risk if lapses linger. (Inference from history + agency slowdowns.) History, Art & Archives
• ACWX: Follows global risk tone; often mirrors SPX unless USD swings dominate. Vanguard
▶ What to Watch Next
Disclaimer: Past performance ≠ future results. Shutdowns are political events; markets care more about duration and data delays than headlines. Powered by AI-Intela v2.8 — GPT-5 Thinking.
Intela Brief: U.S. Government Shutdowns — History, Duration, and Market Performance
Grades: Sources A/B | Signal: Medium | Bias: Mixed
ConclusionSince the late 1970s, shutdowns have been short and episodic, with only two lasting beyond three weeks (1995–96 and 2018–19). Stocks usually hold up or rise during and after shutdowns; the big 2013 and 2018–19 cases coincided with S&P 500 gains. So what: unless this one drags on for weeks and obscures key data, history suggests limited equity damage in week one and a tendency to grind higher after.
Flows / Breadth / 🛢 Rates — Key history snapshots• Funding gaps since 1977: Most lasted 1–3 days; notable outliers were 21 days (Dec 1995–Jan 1996), 16 days (Oct 2013), and 35 days (Dec 2018–Jan 2019) — the longest on record. History, Art & Archives+2Congress.gov+2
• Equities during shutdowns: On average, near flat to slightly positive; 2013 rose ~3.1% during the 16-day lapse, and 2018–19 rose ~10% over the 35-day stretch; 10-yr yields tend to dip a few 0.01% steps. Business Insider+2Yahoo Finance+2
• Mixed aggregates: Some estimates say the average shutdown saw ~–1.6% for the S&P 500 across episodes, underscoring method differences but the same takeaway: no consistent damage. Investopedia
🗂 Mini-timeline (durations & market color)
• Nov 1995 (5 days) & Dec 1995–Jan 1996 (21 days): Long political standoff; equities volatile but no lasting bear turn tied solely to the shutdown. History, Art & Archives
• Oct 2013 (16 days): S&P +~3.1% during the lapse; bonds steady to slightly firmer as yields eased. Business Insider
• Jan 2018 (2–3 days) & Feb 2018 (hours): Too brief to matter for trend. History, Art & Archives
• Dec 2018–Jan 2019 (35 days): Record length; S&P climbed ~10% amid a broader rebound from the Dec 2018 trough. Business Insider
Possible TSP Consequences (history-guided, not advice)
• USD: Little pattern; can soften at the margin if data delays mute Fed clarity. Reuters
• AGG: Small bid from “safety”; 10-yr often slips a few 0.01% steps during lapses. LPL Financial
• SPY: Historically flat to up during; tends to grind higher 1–3 months after. Vanguard
• IWM: More sensitive to contracting/permits delays; relative underperformance risk if lapses linger. (Inference from history + agency slowdowns.) History, Art & Archives
• ACWX: Follows global risk tone; often mirrors SPX unless USD swings dominate. Vanguard
▶ What to Watch Next
- Duration risk: If it passes ~3 weeks, odds of market chop rise vs. the “shrug” base case. History, Art & Archives
- Data blackout: Delays to jobs/CPI can raise rate-path uncertainty; a longer gap could finally jar equities. Kiplinger
- Credit/liquidity tells: Widening credit spreads or T-bill quirks would force faster political compromise — and likely cap drawdowns. Reuters
- [A] U.S. House History — “Funding Gaps and Shutdowns in the Federal Government” — updated historical table | Viewed 2025-10-02 12:41 CEST | Bias: Official Data (Neutral). History, Art & Archives
- [A] CRS (Library of Congress) — “Past Government Shutdowns: Key Resources (R41759)” — 2024–2025 updates | Viewed 2025-10-02 12:41 CEST | Bias: Official Data (Neutral). Congress.gov
- Reuters — “Longest U.S. government shutdowns” — 2025-10-01 | Viewed 2025-10-02 12:38 CEST | Bias: MBFC “Least Biased.” Reuters
- LPL Research — “Eight Things to Know About Government Shutdowns” — 2025-09-30 | Viewed 2025-10-02 12:40 CEST | Bias: House View (Potential Skew). LPL Financial
- Business Insider — “How Markets Have Reacted to Past Government Shutdowns” — 2025-10-01 | Viewed 2025-10-02 12:39 CEST | Bias: MBFC “Left-Center.” Business Insider
- Investopedia — “Government Shutdowns Usually Don’t Bother Stocks” — 2025-10-02 | Viewed 2025-10-02 12:37 CEST | Bias: MBFC “Least Biased.” Investopedia
- Vanguard — “Staying the course during a government shutdown” — 2023–2025 page | Viewed 2025-10-02 12:40 CEST | Bias: House View (Potential Skew). Vanguard
Disclaimer: Past performance ≠ future results. Shutdowns are political events; markets care more about duration and data delays than headlines. Powered by AI-Intela v2.8 — GPT-5 Thinking.
