Global securities markets have been on the rise since US President Donald Trump was elected last November. Investors have been optimistic about the “business friendly” agenda that Trump has carried with him as he has taken over in the Oval Office, and the prices of stocks have certainly shown for it with the S&P 500 up a little more than 8.5% since last November. But even amidst the rising markets, Trump still proves to be a wild card for Wall Street and global markets. The most recent test? Syrian airstrikes.
The news of the United States Navy launching almost 60 cruise missiles into a Syrian airbase sent shockwaves through the market on Friday. Gold reached a 5 month high and the Japanese Yen appreciated considerably as investors around the world fled to traditional safe-havens with their money to ride out the storm. The price of American crude oil was also up almost 1.6%, which is typical in the context of rising tensions with the Middle East due to its obvious geopolitical importance. Asian markets and US futures closed at a loss on Friday.
The continued rise of securities prices in global markets even after Trump’s inauguration can be attributed in part to a general feeling of relief among investors that Trump has “so-far” been considerably more moderate in terms of his trade policy than he promised to be throughout his campaign. The airstrikes in Syria, however, are only the most recent example of Trump’s unpredictability, which fuels a nagging sense of uncertainty that investors have been grappling with all year. The most recent market downturn at the end of last week shows that uncertainty surfacing for a breath of fresh air.
Whether or not the negative trend reversal will continue moving forward is hard to say. According to the Wall Street Journal, many investors around the world seem to think that the markets will recover and place their confidence once more in the hands of Mr. Trump. One thing is for sure though: if Trump continues down the road of the US being “ready to take unilateral action against North Korea,” he’s bound to make the Chinese very unhappy. And that will almost certainly have a lasting effect on global markets. Stay tuned.