How do you win a game of chicken?
You rip your steering wheel from the column and throw it out the window in full view of the other guy.
Once he recognizes that you cannot act rationally, even if you want to, he swerves away… Every time.
The stock market continues to trade downward based on the increasingly aggressive game of chicken
being played in Washington DC. We think this shutdown will end much like the last shutdown ended in
1995. Look at the chart below. In 1995, the market sold off during the shutdown as it is now and then
rebounded well above the previous highs. If any kind of agreement is reached in before the debt ceiling
deadline on October 17th, the stock market could rally as it did in 1995-1996. Although our analysis leads
us to believe there is a very slim chance of no agreement being reached before the deadline, we are
monitoring the situation very closely and will let you know if the situation changes.
The views expressed herein are those of the author and do not necessarily reflect the views of
Morgan Stanley Wealth Management or its affiliates. All opinions are subject to change without
notice. Neither the information provided nor any opinion expressed constitutes a solicitation for
the purchase or sale of any security. Past performance is no guarantee of future results.