Stock Market: "Asian shares skid as Obama confirms air strikes on Iraq"
TOKYO (Reuters) - Asian shares tumbled on Friday as investors sought out safe-haven assets on growing fears that conflicts in Ukraine and the Middle East could sap global growth, extending losses after U.S. President Obama said he had authorized air strikes in Iraq.
Obama said in an address that he authorized targeted strikes to protect the besieged Yazidi minority and U.S. personnel in Iraq, after the Iraqi government requested help.
The market is forward looking. Prices are based, to a large degree, on what traders predict will happen in the future.
Some traders are decreasing their exposure to risk by selling some stocks on the possibility that a limited number of small airstrikes might escalate.
Contrary to the views of many anti-war activists, more war is bad for the market. (Exceptions being, sometimes: gold, oil. And sometimes defense stocks).
IMO airstrikes will not escalate to American "boots on the ground".
However, there is a real economic threat to stocks posed by military action-- and that is the ongoing confrontation between Putin & the Ukraine-- particularly the boycotts. It looks to me that because of this the market will mainly be moving down for a while.
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How would you play this if you were a trader? I dunno-- maybe short the overall market, buy oil, short airlines. Secondarily maybe buy gold, some defense. Probably lighten up on stock holdings, move into more cash.
I never predict markets of course, but if I did I might guess the overall market will have a bad day tomorrow. Might see a move up in energy (oil) however? Airline down...????
Bottled water play ?
or MRE's.
Seriously though-- a lot of people are going to lose money on this-- and vice-versa.