The Financial Markets are Ignoring the Saber Rattling
$DIA, $SPY, $QQQ, $VXX
Financial markets have not reacted much to the escalation in tensions between the US and NKorea, and that is largely because in the worst-case scenario it is impossible to guess an appropriate price for things like stocks and bonds.
It’s hard to price a potentially extinction event for the Korean peninsula.
It’s a point also made by Mark Mobius, the Templeton Emerging Markets Group Executive Chairman for emerging-market investing.
Recall that in a May interview about the prospect of a North Korean nuclear conflict he said, “there’s nothing you can do about it — if something breaks out, we’re all finished anyway.”
Maybe that is why the worst day this year for the Kospi Index of South Korean stocks was on 28 July, which was all about a global tech-stock retreat and nothing to do with geopolitics.
The CBOE Volatility Index (VIX) 15.74, +4.63, or +41.7% to a 4 month high after drifting near an all-time low from mid-July to early August.
Thursday, the US major stock market indexes finished at: DJIA -204.69 at 21844.01, NAS Comp -135.46 at 6216.87, S&P 500 -35.81 at 2438.17
Volume: Trade on the NYSE came in at: 859-M/shares exchanged
- NAS Comp +15.5% YTD
- DJIA+10.5% YTD
- S&P 500 +8.9% YTD
- Russell 2000 +1.1% YTD