HOW DOES WAR AFFECT USA STOCK MARKET
Russian attack over Ukraine, dipped stock market across the world, most countries that have no relation over business terms with Russia and Ukraine but the war definitely will affect the global economy, which is just a gloomy part of stock market being over sensitive.
War is never good for anyone, except those who profit from wars.
No good comes from war, and it’s always expensive for those invading and those being invested. Moreover, the imposed sanctions may have a limited impact due to Europe getting 30% of its oil from Russia and about 45% of its natural gas.
Having China as a customer for its products, Europe could suffer more from long-term sanctions than Russia.
The impact on global stock markets, especially the U.S, during these types of events in the short term can be volatile, but long-term, the market usually bounces back.
According to a report from LPL Research, they looked at geopolitical events and how the stock market reacted over history. For example, during Pearl Harbor, the S&P 500 was down 11% in a single day after the attack. However, one year later, the S&P 500 was up 15.3%. According to the report, the same thing happened with the Vietnam War and both Gulf wars.
During 9/11, the S&P 500 was down -4.9% in one day, and by the end of the 12th day, the market was down -11.6%. It only took 31 days to recover, and the market was flat in 2011.
When Russia invaded and annexed Crimea in 2014, the market was down about 2% over several days; however, the market finished out the year up 11.39%.
HOW DOES WAR AFFECT USA STOCK MARKET
Like previous times, I believe the market will shrug off this event just as it has in the past. But, looking back on history, all these events were buying opportunities for some quality companies.
This market was volatile before the Ukraine invasion due to inflation worries and Covid. However, the impact of the Russia/Ukraine invasion is exacerbating the volatility in our market.
For most of us, this war doesn’t directly affect except for higher prices, the stock market and having stuff on back order. But , think about families sending their daughters and sons off. Think about these soldiers giving up everything to protect our country. Please pray for their safety and they come home to their families.
The Russia Ukraine war will bring uncertainty to the market. All around the world, the stock markets has already dropped if you have been following closely.
It has already reported that food, petrol and electricity costs will be rising due to the war. The construction costs will be rising too.
In terms of local demand, some investors will be having second thoughts and may hold back to look at the situation in Russia first.
If we look back at history, there are many threats and wars that happened in North Korea, Iraq, Afghan. The property market remains slightly stable during this period of time, unlike the stock market.
The fundamentals of demand and supply is still supporting it. Majority of homeowners are unlikely to reduce their asking price all of a sudden because of the war.
The war between Russia and Ukraine has intensified and this conflict has 13 days on Tuesday and its effect is visible on the stock market, from crude oil to gold prices.
Due to the intensification of corrosion, the price of precious metals has also continued to rise. If you are planning to buy jewellery then it is important for you to know their latest prices first.
Hopefully this is going to be another short war that goes away quickly and may the people living in Russia and Ukraine rebuild their lives.
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HOW DOES WAR AFFECT USA STOCK MARKET