As the government shutdown enters its third day, the press is going bonkers as it attempts to concoct new doomsday scenarios that could tear down our powerful stock market melt-up.
While the shutdown clock officially started late Friday, today is the first day federal agencies will close their doors. But as Uncle Sam takes a break, the noise machine has kicked into overdrive. The media is working around the clock to document the many horrors of the shutdown and all the political grandstanding that comes with it.
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We don't blame them for the deluge. After all, Mitch McConnell could squash the whole thing with a noon vote today. We need to cram in all the fear mongering we can before the shutdown disappears and everyone forgets it ever happened in the first place...
Our favorite theory is the idea that the government shutdown will somehow rattle investors' faith in the stock market. They keep trying to tell us how political strife will send the averages plummeting while completely ignoring countless recent events that prove otherwise.
A little more than a year ago, they told us Trump's election would send the market spiraling out of control.
It didn't. The S&P 500 is up 35% since November 2016.
Back in 2013, they said the first government shutdown in more than 17 years would halt the bull market in its tracks.
False. U.S. stocks closed out the year with gains approaching 30%.
In late 2012, the financial news told us the so-called "fiscal cliff" could spark the next big bear market.
Wrong again! A final-hour agreement kicked off the strongest one-year rally since the financial crisis.
Now they insist a new government shutdown is a major threat to stocks...
Sure, stocks could lose a little ground over the next few weeks. But the gyrations of the markets have nothing to do with this silly little shutdown.
I could dig up countless charts and statistics that attempt explain how the stock market could act during a political hissy fit like this one. We could even analyze how stocks reacted to the almost 20 government shutdowns that have taken place over the past 40 years.
But there's no point. None of the data or charts matter.
It's never different. The fear (or lack of fear) over a potential shutdown was already priced into stocks. That's why you didn't see any panic late last week when a shutdown started to look inevitable. And it's why you aren't seeing any major pre-market moves today as the shutdown takes effect.
We don't have to get into the nitty gritty of what each side of the debate wants. We don't need to factor in how negotiations about immigration, a border wall, or health care will affect the outcome. Political spats like these have little bearing on long-term market moves.
Enough with this nonsense. We need to concentrate on more pressing issues. The news cycle moves so fast these days that the herd will forget these shutdown shenanigans ever happened before the first quarter is in the books.
Ignore the self-serving politicians and focus on your trades. Your portfolio will thank you.
This article originally appeared on The Daily Reckoning.