Coming on top of attacks in Beirut on Thursday and the possible bomb-related downing of a Russian charter flight in October, the attacks have highlighted the global threat posed by ongoing violence in the middle east.
American officials were quick to announce that no “credible threat” exists against U.S. targets, for which we are thankful. As attention turns to analyzing the attacks, experts around the world are already thinking about the financial, economic, and security implications of these new threats.
How will markets react to the attacks?
As always, there is no way to know for sure how single events will affect markets. However, we can take some educated guesses:
- Volatility in financial markets around the world is likely as investors react to geopolitical uncertainty and the expectation that western nations may take a more active role in overseas conflicts.
- Oil may experience a rally as investors hedge their bets against further instability in the Middle East.
- U.S. Treasuries and other so-called “safe haven” investments may see interest as investors seek shelter from uncertainty.
- The Euro may drop against the U.S. dollar and other currencies because of increased headwinds.
Though the deplorable attacks are terrible in their human cost, they likely won’t change the overall market calculus for U.S. investors. We will wait and see what happens this week in European markets and will advise you of any concerns as needed.