KUALA LUMPUR, March 14 (Bernama) -- The FTSE Bursa Malaysia KLCI (FBM KLCI) ended the week slightly higher, in line with regional indices despite the weaker performance on Wall Street overnight. At 5 pm, the FBM KLCI rose 2.12 points or 0.14 per cent to 1,512.15 from Thursday’s close of 1,510.03. The market bellwether opened 10.08 points lower at 1,499.95, and moved between 1,493.29 and 1,516.25 throughout the day. On the broader market, gainers outpaced losers with 680 to 292, while 437 counters were unchanged, 1,009 untraded, and 13 suspended. Turnover was marginally lower at 3.24 billion units worth RM2.5 billion from 3.25 billion units worth RM2.90 billion on Thursday.
Wall Street is bracing for another potential government shutdown as President Donald Trump’s tariff policies and budget disputes continue to fuel market uncertainty. While a shutdown could cause short-term volatility, historical trends suggest investors shouldn’t panic.
Shutdown Deadline: March 14
- Without a stopgap spending bill, the government will shut down at midnight on March 14.
- House Republicans introduced a bill to extend funding through Sept. 30, which Trump has endorsed.
- However, uncertainty remains over whether the bill will pass in time.
Market Impact: What History Tells Us
- S&P 500 Performance During Past Shutdowns:
- Flat on average during 22 government shutdowns since 1976.
- Up 12.7% on average in the 12 months following a shutdown.
- Example: Stocks rose over 10% during the 2018-2019 shutdown under Trump.
- 2013 shutdown (Obama’s second term): +3% during 16 days.
- 1995-96 shutdown (Clinton’s first term): Flat during shutdown, +21% in the next year.
Takeaway: Markets tend to recover quickly, even after prolonged shutdowns.
Short-Term Market Volatility Expected
- The S&P 500 is down 2% this year, and the Nasdaq has fallen 6%.
- Cboe Volatility Index (VIX) is up 35%, signaling increased investor anxiety.
- Uncertainty over tariffs and economic slowdown fears add pressure.
Expert Insights
✔️ Ryan Detrick, Carson Group:
"Stocks tend to look past shutdowns. Investors have a lot to worry about, but this shouldn’t be one of them."
✔️ Jay Woods, Freedom Capital Markets:
"Markets tend to sell off heading into a deadline and then rally afterward, regardless of a shutdown. Expect heated political rhetoric to cause short-term market jitters."
✔️ Larry Adam, Raymond James:
"While the shutdown may cause short-term volatility, economic and corporate fundamentals remain solid. The Federal Reserve could provide support with future rate cuts."
What’s Next?
- Market volatility will likely increase leading up to March 14.
- Investors should focus on earnings growth, not political noise.
- The Fed could step in with rate cuts later this year, offering support.
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