Terror And Markets: Sell-Offs Tend To Be Short-Lived

Ted

FYI: The deadly terror attacks in Paris are likely to strike financial markets, too, when trading resumes Monday. But the initial losses expected in risk assets like stocks and the shift into safer holdings like U.S. government bonds and cash are likely to be short-lived, history says.

Investors’ knee-jerk reaction to terror attacks and other "shocks" is to sell so-called risky assets until they have a chance to measure the resulting economic fallout, according to data compiled by Sam Stovall, U.S. equity strategist at S&P Capital IQ. The good news is the losses tend to be recouped relatively swiftly as Wall Street typically concludes that both the domestic and global economy won’t be derailed by acts of terror.
Regards,
Ted
http://www.usatoday.com/story/money/markets/2015/11/15/terror-and-markets-sell-offs-tend-short-lived/75822426/

TSP_Transfer

DoubleLine's Gundlach: Fed hike 'no-go more likely than most people think' Paris attacks alone are unlikely to play a factor in next month's decision.
Reuters By Jennifer Ablan Sun.Nov 15th
DoubleLine Capital co-founder Jeffrey Gundlach said on Sunday that the Federal Reserve may hesitate to raise rates given rocky economic and financial conditions, though the Paris attacks alone are unlikely to play a factor in next month's decision.

The influential money manager, who recently warned that the U.S. Federal Reserve should not tighten monetary policy in December, said the Paris attacks could pressure stock markets around the globe, "which we know Fed officials have been watching, even if they try not to admit it."
Gundlach cited a number of asset classes that are signaling deteriorating conditions: The S&P Leveraged Loan Index, which is at a four-year low, the SPDR Barclays High Yield Bond Exchange-Traded Fund "very near a four-year low" and the CRB Commodity Index at a 13-year low. "You also have the Eurozone doubling down on stimulus. Fed raising rates? Really?"
http://www.reuters.com/article/2015/11/15/us-doubleline-gundlach-idUSKCN0T417Z20151115#Xa4BZzDyQ3V3uC0h.97

VintageFreak

WTF do people have to come and say these things. Why can't they just keep their mouth shut. Market is going to tank now for sure.

PRESSmUP

The markets may react negatively Monday, but that is purely an emotional response. The markets have more than enough impetus to be squirrely without factoring the unfortunate recent events in Paris into the mix. I am not at all optimistic near term and am watching and waiting, and accumulating funds from distributions.

However, the Fed needs to move. Now. Or they will be more of a laughingstock than they already were. We've hit the employment benchmarks and now are simply micromanaging the market averages which is outside of their original mandate.

Crash

Whenever the Fed moves, it's likely to be 0.25%, eh? And further tightening will be extremely gradual, in light of uncle Janet's presentations. And yet, whenever the Fed finally does make that first step, I bet there will be a quick "relief rally." I'm not optimistic, short-term, either. But the near-term has never been my investing horizon.

Sven

We have experienced the same emotional selling after Sept 11th, and that was an even bigger event. The martket eventully fully recovered and advanced more.

I also agree with many posted here that regardless when the hike starts, the rate will be gradual over time.