House GOP leaders are scrambling to reach a deal to avert a partial government shutdown before Friday's deadline, but experts say a shutdown would likely have little impact on the stock market — and might even help it, given the circumstances.
The last-minute wrangling comes after the initial bipartisan deal received an avalanche of criticism from conservatives amid a push from the incoming Trump administration to rein in government spending.
Investor and finance expert Eric Schiffer, chairman of The Patriarch Organization, says, "A government shutdown won't lead to nuclear meltdown in markets, but it will create short-term volatility — but only for a few trading sessions since investors believe President Trump will use his mandate to get it passed."
Ted Jenkin, co-founder of oXYGen Financial, dismissed concerns that a shutdown could have any major impact on the markets, telling FOX Business, "If there is any positive light about the increasing fiscal dysfunction on Capitol Hill, it’s that we have enough history to show that a government shutdown has minimal impact on investors or the financial markets."
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Chris Markowski, founder of Markowski Investments, said in an interview that markets could be impacted by a shutdown, depending on how long it lasts. But overall, shutdown concerns are often overblown.
"I think that what's taken place for the past couple days is kind of extraordinary in the sense that so many people were flooding the phone banks over in D.C. to basically say that enough is enough," Markowski told FOX Business. "We didn't vote for this. We need to stop with all of this ridiculous spending."
Markowski said shutdown scares happen right around Christmastime every year, and he argues that any other year, lawmakers would have already been home for the holidays by now. But this year, "You actually have the taxpayers pushing back."
Markowski believes that investors might be encouraged by a shutdown over the prospect that the government could finally be cutting spending, which would ultimately lead to stronger markets.
He pointed to the fact that one of the largest line items in the federal budget is interest on the national debt, which now exceeds $36 trillion.
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"You can't run a household like that. You can't run a business like that," he said, but, "That's how we're running our country at this point in time."
"I'm sick and tired, quite frankly, as most taxpayers are," Markowski said. "It's not so much about paying our taxes — which we have to do — it's the fact that they're just being wasted on a regular basis."
