13 Reasons Not to Sweat a Government Shutdown VIEW IN BROWSER
BY LUCAS DOWNEY, EDITOR, TRADESMITH ALPHA SIGNALS 2025 is turning into a crowd stunner. Not only did stocks crash in April, but they’ve also soared to new heights. Now they’ve got a chance to put in a repeat performance as investors face their next political challenge… The government may shut down if Congress can’t get their act together by midnight today (Sept. 30). Shutdowns can be a bit of a paradox. On one hand, they wreak havoc on federal workers. The Committee for a Responsible Federal Budget highlights how 850,000 of them are likely to be furloughed as they were in the 2013 and early 2018 shutdowns. That’s never good. Some even worry about key economic reports being delayed with a shutdown. But on the other hand… when you study historical shutdowns and the stock market… you see a powerful market tailwind. One that kicks off right now. If you think stocks sputter when the government’s out-of-office sign is enabled, think again! All shutdowns eventually end… and business resumes. In the meantime, I’ll showcase one of my favorite mid-cap tech stocks that could have 14% upside into year end. | Recommended Link | | | | TradeSmith’s brand-new trading breakthrough has shown it could shrink years – and sometimes even decades – worth of gains into a single afternoon. Now, for the first time ever, this game-changing innovation is going public. Starting today, The T-Line could forever redefine how people make money in the markets by showing – in real-time – what to buy and what to sell for the greatest potential profits in as little as one hour. Join us for The T-Day Summit event right here… |  | | A Historical Look at Government Shutdowns and the Stock Market We’ve all come to learn that disagreements are common in the government. When it comes to passing legislation, both sides of the aisle don’t always agree. Sometimes a government shutdown occurs, lasting days and weeks before resolution. The last shutdown occurred on Dec. 21, 2018, and before that, briefly in January 2018. From there, the stock market ultimately kept chugging along: 
And our study really gets interesting when we look at all 13 shutdowns I was able to locate going back to 1978: Stocks actually gained on average, during and afterwards, even though the shutdowns lasted an average of 12 days. - One month later, the S&P 500 gained 2.1%, on average.
- Three months later, gains jumped to 4.2%.
- Six months later, the average gain was 9.7%.
- Twelve and 24 months after the S&P 500 climbed 16% and 31.9%, respectively.
If history is any guide, stocks are bound for more highs. Don’t jump off the bullish horse simply because of a political squabble. Instead, focus on outstanding businesses… especially when there’s a seasonal tailwind. One Stock to Own into Q4 Seasonal Strength Stocks go up when you give them time. And they really heat up in the fourth quarter. Back in August, I detailed how August and September are historically volatile months. While there were brief selloffs in both months, indexes melted higher. But also in that piece was a massive opportunity coming around the corner. That’s because October, November, and December kick off bullish season for stocks. The chart below illustrates this beautifully. Since 1990, the fourth quarter is bright green with: - October averaging 1.4% gains
- November averaging 2.2% gains
- December averaging 1.3% gains
This is what you should be playing for in 2025: 
So let’s take stock of where we are. We know that government shutdowns tend to spell good fortune for equities. Couple this with seasonal tailwinds, and that’s a one-two punch! Now all that’s left is to focus on a great AI stock to play this theme. Celestica (CLS) is a Powerhouse AI Stock Last October… which, you’ll remember, was also a moment of political uncertainty… I introduced you to under-the-radar stock Celestica (CLS). This up-and-comer designs and manufactures hardware that powers AI systems, plus supply-chain solutions. Back then, I noted how the stock was a good bet at $69. It’s now $250. And all in all, it’s up 368% over the past year: 
This wicked rally isn’t random. Sales jumped to $9.6 billion in 2024 and is slated to balloon to $14 billion in 2026. Net income came in at $428 million in 2024 and will reach $789 million in 2026. Investing is simple. Bet on businesses with a growing top and bottom line. That’s what the Quantum Edge buy rating on CLS revealed in my report this time last year, for example – before the stock climbed 368%. Even simpler, own those companies when there’s a seasonal tailwind. And that’s what TradeSmith’s Seasonality charts reveal. The tool crunches however many years’ worth of data you’d like on a particular stock – then highlights bullish times of year in green… or bearish times in red. Specifically, those are the ones where the stock has risen (or fallen) at least 80% of the time, on your chosen timeframe. Reviewing the past 15 years of CLS price action, we can see that the stock could have even more upside from here… Because Oct. 2-Dec. 30 has multiple green zones for Celestica: 
Overall, in the past 15 years, Celestica has returned an average of 13.7% from Oct. 2-Dec. 30 with a positive hit rate of 73.3%: 
And to prove that Celestica is a good business to bet on, let’s put CLS through the Quantum Score. The Quantum Score weighs 12 fundamental metrics and 17 technicals to give an instant, actionable ranking. Here we can see that CLS scores 93.8, made up of an 85 fundamental score and a 100 technical score. Like in grade school, those are passing grades! 
Bottom line… this is the kind of stock you want to keep betting on. After all, government shutdowns happen… but they aren’t the end of the world. In fact, stocks tend to rally in the months after a shutdown. Given the fact that we are heading into the seasonally bullish months of October, November, and December – don’t waste the opportunity by buying low-quality assets. When the broad market gains a few percent, the top-tier, high-scoring stocks like A.I. up-and-comer Celestica can fly way higher. Especially when you can find the right short-term trade. Last time around, after the “Liberation Day” dust settled in April and May, we had a great outcome with Powell Industries (POWL), for example, in my Alpha Signals service. That stock gained 25% in less than two months. For those who like to take stock trading a step further, automatically get the replay of TradeSmith CEO Keith Kaplan’s T-Day Summit. Because once you’ve locked in on tomorrow’s winners, just like we did today, then TradeSmith’s newest state-of-the art software can find you exactly the right short-term trade to maximize your gains. That’s the winning recipe. Regards, 
Lucas Downey
Editor, TradeSmith’s Alpha Signals | 
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