Stock Market Rebounds, Shaking Off Geopolitical Fears For Now

“The rebound wasn’t so much in response to a specific headline but instead a reduction in anxiety around the events in Iran,” says Adam Crisafulli, founder of Vital Knowledge. While there will be some Iranian retaliation, most reports suggest that it won’t be imminent or direct—“that’s why markets are being relatively calm about it.”

Wall Street appears content with the view that tensions with Iran will eventually cool down: “The near-term conclusion from investors seems to be that a full on military conflict can be avoided,” according to Dan Eye, director of equity research at Roof Advisory Group, a division of Fort Pitt Capital Group.

History shows that stocks usually recover from negative geopolitical events: Out of 16 major events dating back to 1990—including the Gulf War, Iraq War and 9/11—the Dow fell an average of only 2%. Over the next three and six-month periods, the Dow rose almost 90% of the time, with average gains of 5% and 8%, respectively, according to LPL Financial’s research.

“As serious as this escalation is, previous experiences have indicated it may be unlikely to have a material impact on U.S. economic fundamentals or corporate profits,” LPL Financial’s chief investment officer, John Lynch, wrote in a note. He says investors selling off assets may be doing so prematurely, “given stocks have weathered heightened geopolitical tensions in the past.”

skleb1234 All signs of bubble, don't care of any news.

skleb1234 bargain hunters. as this gets worse, stocks will tumble. it’s overdue, actually. “uncertainty” is the middle name of this “administration” somebody should look into how much foreign investment is propping up the market. could be more russian interference for realDonaldTrump

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