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Trump and Democrats are far apart on solving the shutdown. Here’s what could finally end it.

1. Day 37 of government shutdown shows minimal progress towards resolution. 2. FAA plans 10% flight reduction at major airports due to shutdown. 3. Federal workers lacking pay increases pressure for shutdown resolution. 4. Democrats signal willingness for bipartisan negotiations amid shutdown. 5. Projected $21 billion in unpaid wages if shutdown extends through December.

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FAQ

Why Bearish?

Persistent government shutdowns have previously led to market declines. For instance, the 2013 shutdown correlated with a 2.5% drop in SPY.

How important is it?

The prolonged shutdown poses a significant economic risk, undermining investor confidence. Historical patterns show that political stalemate can impact market performance negatively.

Why Short Term?

Immediate disruptions like reduced flights and delayed paychecks impact consumer confidence and spending. Such factors can quickly affect market liquidity and SPY’s price action.

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