Investment Clock insights

Geopolitical impact on markets


Trevor Greetham

10 April 2017

In the first geopolitical flashpoint of the Trump presidency, American warships have fired sixty cruise missiles at the Syrian airbase thought to have launched the recent chemical weapons attack. Although the Trump administration has so far failed to pass major legislation, the president has constitutional authority to act alone in military matters as commander in chief of the armed forces.
Whatever the merits of the action against Syria, market sentiment could take a knock from increased uncertainty if this turns out to be more than a one off. We would be likely to buy a short term dip given positive economic fundamentals. Stocks sold off in very similar circumstances in August 2013, only to rally when UK Prime Minister David Cameron failed to get parliamentary approval for military intervention and President Obama backed down.

In the first geopolitical flashpoint of the Trump presidency, American warships have fired sixty cruise missiles at the Syrian airbase thought to have launched the recent chemical weapons attack. Although the Trump administration has so far failed to pass major legislation, the president has constitutional authority to act alone in military matters as commander in chief of the armed forces.

Whatever the merits of the action against Syria, market sentiment could take a knock from increased uncertainty if this turns out to be more than a one off. We would be likely to buy a short term dip given positive economic fundamentals. Stocks sold off in very similar circumstances in August 2013, only to rally when UK Prime Minister David Cameron failed to get parliamentary approval for military intervention and President Obama backed down.

The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get back the amount originally invested. The views expressed are the author’s own and do not constitute investment advice.