Geopolitical War Shocks Equity Impact
Geopolitical events like wars have a modest impact on equity valuations over the long term.
Too little corroboration in the last 3 days to call a trend (4 articles). Watching for it to gain traction.
Mainstream financial press is carrying this — attention has broadened beyond specialist outlets.
"The recent gains in the market have been primarily driven by record earnings. However, the ongoing conflict is causing fluctuations in risk sentiment."
"We’re sitting at high levels of valuation partly driven by earnings. That overshadowed the concerns around Iran but now earnings season is largely over. We’re not going to suddenly get any more good surprises out of earnings, which means that market attention is now back to Iran."
"The divergence between equity market optimism and the more cautious signals from bond and oil markets reinforces the view that geopolitical developments remain an active and important variable in risk management."
""Historically, geopolitical conflicts have had sharp but short-lived effects on equity markets," Garrett DeSimone, head quantitative analyst at OptionMetrics, said."
"But geopolitical risk and higher rates for longer are already largely priced into stocks."
"The impact on global gross domestic product is modest in all but a few outlier cases."
"What drives equity prices are increased corporate revenue and profit, and the typical geopolitical event isn’t big enough to change those very much."
"Historically, events such as wars, assassinations, and terror attacks are just not that meaningful to the factors that drive markets."