The US Stock Market Thrives At Times Of War, All Past Historical Events

2 years ago
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What effects will the Russian Ukraine War Conflict have on the US Stock Market and where will the S&P 500, Dow Jones and NASDAQ be 6 months from now.

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Stock markets not only survive wars, but also thrive - What does history show?

War in Ukraine has begun, but no one can say for sure what the duration will be, what the magnitude of its escalation will be and what it will leave behind.

However, a war does not bring an end to history. The story goes on. New geopolitical correlations are formed, new alliances are built, economies recover and societies find their footing again.

Stock exchanges do the same. They suffer the effects, absorb the vibrations and emerge again, with the same or different protagonists.

Each war has its own characteristics. Although we can not make accurate future predictions, what we can do is go back in time and see how stock markets have reacted in the past to similar situations.
In most cases, within six months, not only had the fall in markets been amortized, but there had been positive returns. The biggest decline is -14.4% since the beginning of the embargo on oil, which had caused widespread disruption in the field of energy, transport and industrial production, due to the lack of supply.

The scenario is quite similar to today, as the closure of the Russian tap on both natural gas and oil, and possible sanctions on raw materials such as nickel and aluminum, will lead the world economy to a dead end.

On the contrary, we observe that events that shook the world, such as the attack on the Twin Towers, the Gulf War and the Iraq war, despite their tragedy, proved to have had little effect on the international investment community. Six months after 9/11, stock markets were up 6.7%, after the Gulf War 20.6% and after the Iraq war 17.4%.
In the following table, we observe the response of the American S&P 500 index to a series of war and terrorist events. The table focuses on the duration of the fall and the recovery.

The first column reports the date, the second the date, the third shows the percentage drop of the S&P 500 during the first session, the fourth column shows the total percentage decline of the S&P 500, the fifth column shows the number of sessions until the fall is complete and in sixth place is the number of sessions that passed, until the S&P 500 recovers.

Although the averages also have their own statistical value, giving the 22 days for the completion of the fall and the 47 days for the closing of the cycle and the recovery, it is interesting to study each event separately.
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🔥 Disclaimer: Everything expressed in this video is a personal opinion provided for entertainment value only. I am not a professional nor a financial advisor. These are not instructions, suggestions, nor directions as to how to handle your money. Please, always do your own due diligence.
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