Markets Amid Middle East Tensions
The headlines of the weekend were the bombing of Iran by the U.S. and its ally, Israel. The barrage of missiles topped 2,000 over the weekend, and the leadership in Iran is splintered at best. Markets are understandably jittery this morning, with futures down about 1%. Given the geopolitical backdrop, I thought it important to remind investors how markets have reacted to conflict in the past.
On average, markets bottom 21 days after a conflict begins, and losses are fully recovered in about 50 days. However, that data includes the 1941 attack on Pearl Harbor, which took 307 days to recover. After 9/11, markets fully recovered in just 31 days. My point is that we don’t know how tensions in the Middle East will unfold, but markets tend to operate efficiently over time, and I expect the same to hold true here.
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