"The Pulse" -- #123 / Do Government Shutdowns Affect Markets?

Recruiting Timeline:

Banking:

Where We’re At:

• SA 2027: No updates this week. 1 bank is actively recruiting for SA 2027. This is a slower start compared to last year, January 1st will be a huge date for app releases

• FT 2026: No updates this week. 62 firms are actively recruiting for FT 2026  

• If you need some interview support or just need a place to vent, check out our Coaching Program: Coaching for banking, consulting, and buyside recruiting | The Pulse. 95%+ of those coached for the summer 2026 recruiting season received offers!

New SA 2027 Applications:

• None

New FT 2026 Applications:

• None

See below to gain access to our premium database, updated weekly, which houses the application processes for over 300+ banks/consulting/buyside firms! Gain an edge over everyone else by not having to spend countless hours tracking applications and deadlines.

Consulting:

Where We’re At:

• Just 2 releases this week. We will continue to see boutiques releasing applications for FT and SA into the winter.

SA 2026 released apps:

• Metis Strategy - Strategy and Consulting Intern (SA 2026)

• Charles River Associates - Summer Analyst (SA 2026)

SA 2027 released apps:

• None

FT 2026 released apps:

• None

Buyside:

Where We’re At:

• SA 2027: Insight Partners opened its app this week. There are currently 6 buyside firms actively recruiting for SA 2027

New SA 2027 released apps:

• Insight Partners: VC, kind of a call center tbh (SA 2027)

The database is updated weekly and contains 300+ Investment Banking and Consulting internships/full-time positions along with:

• Interview tips for specific companies

• Interview prep material

• Applications and deadlines linked so that you can apply with one click

• Insider information about the application process

• Professionals to network with

• Buyside deadlines, interview prep, and people to network with for the sweatiest of students

We send the updated dataset every week with the latest banking and consulting job postings. We released our 123rd update today.

Students we have been helping have already landed roles at Blackstone, Goldman, J.P. Morgan, Jefferies, Citi, and Solomon.

To get access to the database and the weekly updates, you make a one-time investment of $50 Credit Card / Debit Card: (ThePulsePrep 25% SALE—Stripe.com) that grants you annual access to the updated database (please reach out for additional payment options). If you don’t find our services helpful, we simply ask for feedback on an area we can improve upon and will refund your $50.

This is a small investment for a huge payout when you secure your dream offer!

Premium Database——>Database for banking, consulting and buyside roles | The Pulse 

Market Update: 

Do Government Shutdowns Affect Markets?

You might have seen last week that the government went into a shutdown. Government shutdowns always make big headlines, but they’re usually more dramatic in the news than in the markets. A shutdown happens when Congress can’t agree on a spending bill, so many federal agencies have to temporarily stop normal operations until a deal is reached.

Since the 1970s, the U.S. has had around 20 shutdowns, most lasting less than 10 days. A few have been much longer, like the shutdowns in 1995–96 (one lasted 21 days), a 16-day one in 2013, and the record 35-day shutdown that stretched from late December 2018 to late January 2019.

So, what happens to stocks during these periods? Historically, not much. The market tends to brush them off. During the 2013 shutdown, for example, the S&P 500 actually gained about 3%. In the 2018–2019 shutdown, which was the longest ever, the S&P rose roughly 10% while the government was closed. Even back in the 1990s, the market’s reaction was mostly flat.

In other words, shutdowns rarely cause big sell-offs or rallies by themselves; they just add a bit of noise and short-term uncertainty.

The reason is that shutdowns don’t actually change the core forces that drive stock prices — things like company profits, interest rates, and overall economic growth. Even though the government temporarily pauses some services, essential operations keep running, and federal workers usually get paid retroactively. Because investors know these facts, they tend to look past the political drama and focus on the bigger economic picture.

That said, longer shutdowns can still cause mild ripple effects. For instance, if government data like jobs or inflation reports get delayed, it can make investors a little jumpy since markets rely on that information. And if a shutdown starts to drag out for months, it could start to affect consumer spending or business confidence. But up to this point, none of the past shutdowns, not even the 35-day one, have led to major or lasting stock market damage.

Historically, when the government reopens, markets tend to rally. It’s tough to attribute this specifically to the government reopening as opposed to other macro/business factors, but there is some data supporting it. The year following the 2013 shutdown saw a 19.7% gain in the S&P 500, and after the 2018–2019 shutdown, the index climbed about 26%. Looking across all shutdowns since 1980, average 12-month returns have landed between 12% and 17%, showing that markets often rebound strongly once the uncertainty clears.

For young investors, the important takeaway is: don’t let political headlines scare you out of long-term investing decisions. Shutdowns come and go, but the market’s direction is shaped by fundamentals, not temporary political standoffs.

Disclosure: Nothing written here is financial advice or should be used for investment decisions.

Free Cash Flow

At the end of the day, all anyone cares about is how much money a company makes.

Basic FCF Calculation (available to all stakeholders):

1. EBIT * (1-tax rate)

2. + D&A

3. -changes in Net Operating Working Capital

4. -capex

Why do we take tax-affected EBIT? This measure essentially provides us with normalized income that a business generates from its core activities.

Why do we add back D&A? Depreciation and amortization are core, non-cash expenses. So, they need to be added back since D&A expense is not a true cash deduction.

Why do we subtract the change in net operating working capital? This is probably the most complicated piece of the formula to understand. But essentially we want to subtract any cash that needs to be tied up in the business to maintain core operations (maintenance cash). The subtraction of the change allows us to account for any cash inflow or outflow that may occur from the fluctuation in amount of maintenance cash needed to run the business from period to period.

We do we subtract capex? Capital expenditures are deducted since these are direct cash outflows of the business and considered to be a part of core business activities. (Some capex-lite businesses may exclude this from the calculation as capex may be deemed as non-core).

Do you see the pattern here? We are calculating free cash flow to determine the profitability from a business’s core activities. It is impossible to determine all of the non-core bullshit that can impact a company’s profitability over time (such as litigation expenses), so all we can do is adjust line items to remove all non-core activity. This allows us to forecast.

Going Forward:

We Want to Meet Your Club

We want to partner with your club / organization to prepare your members for summer 2027 investment banking and consulting recruiting. In the past, we have partnered with clubs across UPenn, UMich, UVA, UCLA, and more.

Please shoot an email to [email protected] to set up a time to meet!

Please reach out to us with any questions about recruiting or if you’re interested in meeting the team! ([email protected])

We are happy to chat, review resumes, or help set up a coaching session.

Check us out on LinkedIn (The Pulse) and Instagram (ThePulse)

Proudly Produced,

The Pulse

“The Pulse” #123